Best Buy (NYSE: BBY) is still around. The company reported revenue growing a modest 4% ($9.32 billion). The results missed estimates by a negligible amount. Chances are good that the seasonally strong period, driven by Black Friday and the Christmas holidays, will give revenue a lift.
Best Buy missed consensus estimates only slightly, due to the limited supply of Apple’s (NASDAQ: AAPL) iPhone X. Demand for iPhone 8, while good, is probably subdued as consumers wait for X to come out first.
As iPhone’s positioning in the market and finds a new equilibrium point, Best Buy will likely benefit. By January, customers will not have a backlog or waitlist to worry about. That should increase the device’s sales at stores.
One analyst is playing it safe with BBY stock. Credit Suisse fretted over a harder Y/Y comparable. Analyst Seth Sigman thinks investor expectations for upward EPS revisions are already priced in the stock.
Best Buy stock is stuck in a trading range of between $53 - $58 and is valued at a P/E of below 15 times. Its forward P/E is 13 times. The stock is still cheaper than Wal-Mart’s (NYSE: WMT), which trades at a 23x P/E.
Takeaway
Best Buy is attractive at these levels. Demand for gadgets from Fitbit (FIT) and GoPro (GPRO) may improve, giving the retailer stronger sales.
