Wedbush upgraded Best Buy’s stock to Buy from Hold and lifted the stock’s price target to $130 (17.3% upside potential) from $95, citing a shift in consumer spending.
Wedbush analyst Seth Basham wrote in a note to investors that Best Buy (BBY) is benefiting from a change in consumer discretionary spending toward home necessity products from travel and entertainment as a result of the ongoing COVID-19 pandemic. Basham said that consumers who made “quick fixes” earlier to accommodate remote working and online learning facilities are now upgrading for longer-term solutions.
On Aug. 13, Piper Sandler analyst Peter Keith raised Best Buy’s price target to $127 (14.6% upside potential) from $112 and reiterated a Buy rating. Keith expects strong back-to-school spending, new product cycles which includes 5G iPhone and new game consoles, to boost the company’s sales in the second half of fiscal 2021.
On July 21, the technology product retailer reported that 2Q sales, rose 2.5%, mainly driven by a spike in online sales. Online sales during the reported period jumped 255% year-over-year, fueled by strong demand for computing, appliance, and tablet products. The retailer will report its 2Q results on Aug. 25.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 10 Buys versus 8 Holds. The average price target of $103.53 implies downside potential of about 6.6%. (See BBY stock analysis on TipRanks).
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