After Best Buy's Q2 Beat, CFRA Says Retailer Has Catalysts To Drive Stock

Best Buy Co Inc BBY reported better-than-expected results for its July quarter, and there are a number of catalysts to drive shares “to new highs,” according to CFRA.

The Best Buy Analyst: Camilla Yanushevsky maintained a Buy rating on Best Buy with an unchanged $130 price target. 

The Best Buy Thesis: The retailer has a dominant market position, having captured share from Circuit City and HH Gregg HGGGQ, Yanushevsky said in a Tuesday note. (See her track record here.)

Best Buy has more robust omni solutions to rival Amazon.com, Inc. AMZN and has shifted focus to services, with the acquisitions of GreatCall, Critical Signal Technologies and BioSensics, the analyst said. 

Those services are not only underappreciated by the market, but also timely given the high interest in monitoring health at home, Yanushevsky said. 

Best Buy reported GAAP earnings of $1.65 per share, meaningfully higher than the 89 cents per share reported in the same quarter last year, while revenues grew 3.9% to $9.9 billion.

Among the catalysts for Best Buy shares, the analyst highlighted a shift in trends to remote learning, the 5G upgrade cycle, a delayed Amazon Prime Day and next-generation video game console launches.

CFRA raised its Best Buy earnings estimate for fiscal 2021 from $5.76 per share to $6.31 per share.

“COVID-19 has fundamentally changed how consumers learn, work and interact, which should accelerate tech innovation and make BBY's mission even more timely,” she said. 

BBY Price Action: Shares of Best Buy were down 5.94% at $110.48 at last check Tuesday.

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