We have maintained our long-term Neutral recommendation on
Best Buy Company Inc
) with a target price of $23.00 as risk reward remains fairly
balanced for the stock at this juncture.
Why the Reiteration?
The company's strategic initiatives, including its price match
policy, multi channel strategy, lucrative assortments, multi-year
cost reduction program and employee training is helping Best Buy
in its turnaround process.
Best Buy posted fourth-quarter fiscal 2013 earnings of $1.64
per share that came ahead of the Zacks Consensus Estimate of
$1.56. Total revenue of this Zacks Rank #3 (Hold) stock marked a
marginal improvement to $16,711 million and came ahead the Zacks
Consensus Estimate of $16,318 million. Moreover, the rate of fall
in comparable-store sales decelerated to 0.8% from 1.3% in the
The company's healthy online sales performance remains a
positive as heightened competition from online retailers like
), was adversely affecting its sales and profitability. During
the last reported quarter, domestic segment's online channel
revenue jumped 11% to $1.3 billion, reflecting strong
Despite several initiatives taken by the company to uplift its
performance, the first-quarter of fiscal 2014 remains challenged
as domestic revenues will be pressured on account of Pre-Super
Bowl sales shifting to the fourth-quarter of fiscal 2013.
Moreover, adverse product and service mix, increased marketing
expenses and its competitive pricing policies are likely to
impact its results negatively.
Other Stocks to Consider
However, until any further upward revision in the Zacks Rank
on Best Buy, other stocks worth considering in the non-food
retail sector include
) both holding a favorable Zacks Rank #1 (Strong Buy). These
companies are expected to continue with their upbeat
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