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Thursday, October 1, 2020

Best Buy Co. Inc. (NYSE:BBY) is Waving the Bear Flag

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The Best Buy Co. Inc. (BBY) shares are trading at lower $84.90 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $87.29.

To add more color to this target, the company’s high over the last year is $91.99 and the low is $48.10. Over the last 52 weeks, BBY is down -7.71% while the S&P 500 is up 1.02%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, BBY reported a profit of $1.97 billion. Best Buy Co. Inc. also saw revenues increase to $8.56 billion. In addition, BBY has free cash flow of $649.0 million as of 04-2020. The company’s EBITDA came in at $436.0 million which compares well with its peers.

BBY booked profit margins of 3.30%, its Return on Equity (ROE) is 43.20%, and its Return on Assets is 9.10%. All told, it is clear that, BBY needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. BBY has a short ratio of 2.57 and outstanding shares of 258.30M.

Company Outlook

BBY has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.1 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 5.41. Best Buy Co. Inc. BBY also noted assets of $15.61 billion at the end of the last quarter. Investors should also keep an eye on sector updates as BBY has historically followed its peers on positive news.

All told, Best Buy Co. Inc. BBY has strung together solid data and demonstrated underlying fundamentals. At its current valuation, BBY represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Best Buy Co. Inc. BBY is now commanding a market cap of 21.94B and a float of 228.74M. BBY is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of BBY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in BBY, either long or short, and we have not been compensated for this article.

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