Market Overview

Brian Sozzi Agrees With Jefferies' Downgrade Of Best Buy

Share:
Brian Sozzi Agrees With Jefferies' Downgrade Of Best Buy

The Street's retail expert Brian Sozzi agrees with the latest downgrade to hit Best Buy Co Inc (NYSE: BBY).

Jefferies' Dan Binder downgraded Best Buy's stock to Hold from Buy on Monday due to his concerns that a maturing 4K TV cycle will yield softer same-store sales and margins at Best Buy's stores.

Binder noted that selling prices for 4K TVs have fallen 30 percent on a trailing 12-month basis and Best Buy's peers are actually lowering their stock keeping unit (SKUs) counts in the 4K TV category.

Related Link: Virtual Reality Could Be Revolutionary For Best Buy

Sozzi noted that around 32 percent of Best Buy's domestic sales throughout 2015 came from the consumer electronics section, including large-screen TVs as well as health and fitness products. He added that demand for large-screen TVs helped spur the consumer electronics segment but now a change in trends and sales ahead of the holiday season "might spook investors."

However, Sozzi pointed out that declining demand for 4K TVs isn't a phenomenon that has come unexpected. Best Buy's management cautioned investors during a May 24 conference call that "at some point" demand for TVs "will slow" and "at some point" the company won't be able to hold on to its dominant market share in the space.

Binder also lowered his 2017 fiscal year estimates in his downgrade note to $2.85 from $3.07 per share and also slashed his 2018 estimates to $3.01 from $3.42.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for BBY

DateFirmActionFromTo
Jul 2019Initiates Coverage OnNeutral
Apr 2019UpgradesHoldBuy
Mar 2019UpgradesPerformOutperform

View More Analyst Ratings for BBY
View the Latest Analyst Ratings

Posted-In: 4K TV Best Buy 4K TVs Brian SozziAnalyst Color Downgrades Price Target Analyst Ratings Tech Best of Benzinga

 

Related Articles (BBY)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
SKXMaintains44.0
HYMaintains66.0
MSFTMaintains160.0
SKXUpgrades
WLTWMaintains208.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Mid-Day Market Update: Sorl Auto Parts Gains Following Q2 Results; Performance Sports Shares Slide

Coffee Futures Erase Gains