Best Buy (BBY) Stock Forecast & Price Target

Best Buy Co. achieved over $41 billion in consolidated sales for 2024, positioning the company as the largest pure-play consumer electronics retailer in the United States, with an approximate 8% market share in North America. The company's international gross margins improved by 46 basis points to 21.4%, alongside a 107 basis point increase in operating margins to 5.7%, indicating effective cost management and enhanced product margins. Additionally, domestic online revenue rose by 2.6%, comprising 39.5% of total domestic revenue, while categories such as tablets and computing experienced a notable 6.5% growth, reflecting ongoing strong consumer demand and strategic investments in the e-commerce space.

Best Buy Co. is projected to experience slightly negative comparable sales in the first quarter of 2024, with management also forecasting a decline in adjusted EBIT margin to approximately 3.40%, indicating a potential double-digit year-over-year decrease in adjusted EBIT. Notably, the company's weakest performing categories include appliances and entertainment, exhibiting declines of 11.4% and 10.9%, respectively, which could undermine overall sales performance despite some growth in computing and mobile phones. Additionally, the impact of rising SG&A expenses and potential tariff complications could further suppress profitability, leading to revised earnings per share estimates for 2025 down to around $6.00, reflecting a decrease of 8.6% to 14.6%.