Oppenheimer On CES 2016: 'More Evolution Than Revolution,' Best Buy A Compelling Value Play

• Analysts at Oppenheimer attended the annual Consumer Electronics Show (CES 2016) this week.
• In a report issued Friday, Brian Nagel, Dan Farrell and David Bellinger shared their takeaways from the event; they saw “new categories emerging, but overall more evolution than revolution.”
• The experts also singled out Best Buy Co Inc BBY as a compelling value name that offers a means to play the consumer electronics theme.

CES 2016 Highlights

In a report published Friday, analysts at Oppenheimer shared their conclusions after attending CES 2016. They noted that, in the years following the analog to digital shift, the CE sector has mostly “struggled to recreate the drivers of sustained positive momentum.”

Overall, they pointed out, CES 2016 seemed to be “more about evolution than revolution.” Display manufacturers and content providers continue to work side by side to deliver increasingly better picture quality for new-generation TVs. Wearables continue to evolve and, while its focus is increasingly placed on fitness, the space remains flooded by a wide range of players struggling for relevance with relatively similar products.

Related Link: Under Armour Makes A Splash At CES 2016

Drones commanded much more attention at the CES this year. Consequently, Nagel, Farrell and Bellinger left feeling “encouraged that drones seem to represent one of the few truly new consumer-focused categories in a long while.”

Nonetheless, the experts are “still hard-pressed to foresee drones commanding significant mass-market appeal longer term.”

Better Buy Best Buy

Finally, the analysts went into Best Buy, which they see as a “compelling value name,” offering a means to play the consumer electronics retail space. Thus, they awarded the stock an Outperform rating. Under new management, the company is “much more cost and return-focused. Over time, BBY should garner a higher, but still subdued multiple reflective of ongoing structural challenges in CE retail,” the note concluded.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.