Zacks Investment Research Downgrades Best Buy (BBY) to Hold

Best Buy (NYSE:BBY) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a research report issued on Wednesday, March 14th.

According to Zacks, “Best Buy’s extensive investments to upgrade operations with special focus on developing omni-channel capabilities, supply chain and cost reduction opportunities coupled with strengthening partnership with vendors bode well. The company’s “Best Buy 2020: Building the New Blue” program aims to explore growth opportunities and optimize cost. These efforts have helped the stock to outpace the industry in a year and continue post upbeat results, as evident from fourth-quarter fiscal 2018 performance. This prompted management to provide encouraging outlook for fiscal 2019. The company is also concentrating on enhancing mobile phone category in its big-box stores as well as online under its Mobile 2020 strategy. However, management hinted that higher investments in supply chain and increased transportation costs may weigh upon margins. International gross margin is also likely to remain under pressure during the first quarter.”

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BBY has been the topic of several other research reports. Wedbush set a $38.00 target price on Best Buy and gave the stock a “sell” rating in a report on Monday, January 8th. Loop Capital set a $80.00 price target on Best Buy and gave the company a “buy” rating in a report on Tuesday, January 16th. Deutsche Bank set a $56.00 price target on Best Buy and gave the company a “hold” rating in a report on Friday, November 17th. Jefferies Group reaffirmed a “buy” rating and issued a $74.00 price target (up previously from $60.00) on shares of Best Buy in a report on Tuesday, February 27th. Finally, ValuEngine raised Best Buy from a “hold” rating to a “buy” rating in a report on Friday, February 2nd. Three equities research analysts have rated the stock with a sell rating, ten have issued a hold rating, eight have issued a buy rating and one has given a strong buy rating to the stock. The stock currently has a consensus rating of “Hold” and a consensus price target of $70.88.

NYSE:BBY traded down $1.63 during midday trading on Wednesday, hitting $70.49. 3,203,062 shares of the stock were exchanged, compared to its average volume of 3,417,552. Best Buy has a one year low of $47.68 and a one year high of $78.59. The stock has a market cap of $20,606.13, a price-to-earnings ratio of 15.95, a PEG ratio of 0.97 and a beta of 0.94. The company has a debt-to-equity ratio of 0.22, a current ratio of 1.26 and a quick ratio of 0.59.

Best Buy (NYSE:BBY) last announced its earnings results on Thursday, March 1st. The technology retailer reported $2.42 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $2.05 by $0.37. Best Buy had a return on equity of 32.68% and a net margin of 2.37%. The firm had revenue of $15.36 billion for the quarter, compared to analysts’ expectations of $14.52 billion. During the same quarter in the previous year, the company earned $1.93 earnings per share. The firm’s quarterly revenue was up 14.0% compared to the same quarter last year. sell-side analysts expect that Best Buy will post 4.97 EPS for the current year.

In other Best Buy news, SVP Mathew Watson sold 990 shares of Best Buy stock in a transaction that occurred on Tuesday, March 6th. The shares were sold at an average price of $77.21, for a total transaction of $76,437.90. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, CEO Hubert Joly sold 9,591 shares of Best Buy stock in a transaction that occurred on Tuesday, March 13th. The stock was sold at an average price of $72.45, for a total transaction of $694,867.95. Following the transaction, the chief executive officer now owns 728,564 shares in the company, valued at $52,784,461.80. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 356,785 shares of company stock worth $24,999,914. Corporate insiders own 1.21% of the company’s stock.

A number of hedge funds and other institutional investors have recently bought and sold shares of BBY. SWS Partners purchased a new position in shares of Best Buy during the 4th quarter valued at $110,000. Fieldpoint Private Securities LLC purchased a new position in shares of Best Buy during the 3rd quarter valued at $139,000. Mitsubishi UFJ Securities Holdings Co. Ltd. grew its holdings in shares of Best Buy by 232.8% during the 4th quarter. Mitsubishi UFJ Securities Holdings Co. Ltd. now owns 2,030 shares of the technology retailer’s stock valued at $139,000 after acquiring an additional 1,420 shares in the last quarter. Squar Milner Financial Services LLC purchased a new position in shares of Best Buy during the 4th quarter valued at $201,000. Finally, Harbour Capital Advisors LLC purchased a new position in shares of Best Buy during the 4th quarter valued at $205,000. Hedge funds and other institutional investors own 85.11% of the company’s stock.

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About Best Buy

Best Buy Co, Inc is a provider of technology products, services and solutions. The Company offers products and services to the customers visiting its stores, engaging with Geek Squad agents, or using its Websites or mobile applications. It has operations in the United States, Canada and Mexico. The Company operates through two segments: Domestic and International.

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