Best Buy Co., Inc. (BBY) Buy or Sell Stock Guide

Last updated: Jan 09, '18

The analysis below may be helpful to you if you have any of the following questions about BBY stock:

  • Is BBY a buy or a sell?
  • Should I sell or hold BBY stock today?
  • Is BBY a good buy / a good investment?
  • What are BBY analyst opinions, recommendations, ratings?

Here are BBY stock buy reasons/signals:

1. Best Buy has re-engineered its online sales platform, improving the user experience and adding greater ship-from-store fulfillment capabilities.

2. New television, smartphone, gaming, health/wellness, connected home and virtual reality advances can offer product cycles that drive periodic top-line outperformance.

3. Best Buy has cut more than $1 billion from its annual cost structure and is targeting another $400 million in operating income improvement through improved returns, replacements, and damages processes and operational efficiencies.

4. BBY profitability is improving. The YoY profit margin change was 0.85pp.

5. BBY forward dividend yield is 1.99%, higher than the industry (0.78%) and sector (0.64%) forward dividend yields.

6. BBY PEG ratio (P/E adjusted for growth) is 1.18, and it’s low compared to its industry peers’ PEG ratios.

Here are BBY stock sell reasons/signals:

1. Online retailers, mass merchants, warehouse clubs, and consumer product OEMs all compete for market share, resulting in aggressive industry price competition and constraining Best Buy's longer-term margin expansion opportunities.

2. Entertainment sales remain sluggish. Replacement categories in Best Buy's stores are often slower-turning, lower-margin products.

3. Warranty sales have historically been a disproportionate contributor to margins. If consumers continue to gravitate to online retailers or vendor direct-sales platforms, declining warranty attachment rates will weigh on margins.

4. BBY stock price ($69.78) is at the 52-week high. Perhaps now is a good time to sell?

5. BBY average analyst price target ($59.01) is below its current price ($69.78).

6. BBY short share of float is 17.04%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

7. BBY short interest (days to cover the shorts) ratio is 10.33. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on BBY?

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