Wedbush Reports Best Buy Q4 Profitability Exceeds Expectations

According to Wedbush, Best Buy

Q4 profitability exceeded expectations. Wedbush reported that revenue was $16.3 billion, compared with our estimate of $17.0 billion and consensus of $16.3 billion. “EPS was $1.98 (excluding $0.36/share of restructuring charges), compared with our estimate of $1.90 and consensus of $1.85. The EPS beat was driven by restructuring, better than- expected gross margin (due to mobile), and tax rate. Maintaining our NEUTRAL rating, but lowering our 12-month price target to $31 from $37.50 to reflect lower-than-expected top-line growth and comps guidance. Our revised price target reflects a P/E multiple of 9x our FY:12 EPS estimate of $3.45, below its historical 12 – 15x multiple due to slowing growth.” Best Buy closed yesterday at $30.13.