Best Buy (BBY) Stock Forecast & Price Target

Best Buy Co. reported consolidated sales of over $41 billion for 2024, maintaining its status as the largest pure-play consumer electronics retailer in the US, with approximately 8% market share and 33% share of offline sales in the region. The company achieved a substantial gross margin expansion of about 43 basis points year-over-year and a notable increase in operating margin in the International segment, attributed to improved product margins and lower supply chain costs. Furthermore, Best Buy's e-commerce sales channel has doubled since pre-pandemic levels, now expected to account for a mid-30% share of total sales, indicating robust growth potential as the company adapts to changing consumer behaviors.

Best Buy Co. anticipates slightly negative comparable sales in the first quarter, reflecting challenges in key categories such as appliances and entertainment, which saw declines of 11.4% and 10.9% respectively. The company is also forecasting a decline in adjusted EBIT by double digits year-over-year, with guidance for a ~3.40% adjusted EBIT margin, indicating deteriorating profitability. Additionally, despite efforts to boost e-commerce presence, the overall expectation of continued downward pressure on sales and margins raises concerns about future earnings, prompting a reduction in EPS estimates for 2025.