Best Buy Downgraded to Strong Sell - Analyst Blog

Comment

Shutterstock photo

Zacks Investment Research downgraded Best Buy Company Inc . ( BBY ) to a Zacks Rank #5 (Strong Sell) on January 8.

Why the Downgrade?

Best Buy has witnessed sharp downward estimate revisions after reporting disappointing third-quarter 2013 results. The company has long been struggling with dwindling sales in key categories including televisions, notebooks, digital imaging and gaming devices, which in turn, is taking a toll on the company's same store sales results.

Moreover, shares of this consumer electronics retailer have been portraying a sharp downward trend in the past one year, reflecting the company's sluggish performance.

On November 20, 2012, Best Buy reported third-quarter 2013 earnings per share of 3 cents, plummeting 94% from 47 cents earned in the comparable prior-year quarter and missed the Zacks Consensus Estimate of 12 cents.

Though the company's holiday sales were not as bad as expected, Best Buy's total revenue for the 9 weeks period ended Jan 5, 2013, came in at $12.8 billion, down from $12.9 billion for the 9 weeks period ended Dec 31, 2011. Moreover, comparable-store sales inched down 1.4% during the period.

The Zacks Consensus Estimate for the fourth quarter of 2013 and fiscal 2013, plunged 16.4% and 13.8%, respectively to $1.48 and $2.44 per share over the past 60 days. Moreover, for fiscal 2014, most of the estimates were revised downward over the last 60 days, lowering the Zacks Consensus Estimate by 20.5% to $2.17 per share.

The Other Stock to Consider

Not all the consumer electronics retailers are performing as poorly as Best Buy. Conns Inc . ( CONN ), which holds a Zacks Rank #1 (Strong Buy) is worth considering. 



BEST BUY (BBY): Free Stock Analysis Report

CONNS INC (CONN): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
More Headlines for: BBY , CONN


More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com