Best Buy (BBY) Stock Forecast & Price Target

Best Buy Co. reported consolidated sales of over $41 billion for 2024, securing its position as the largest pure-play consumer electronics retailer in the U.S. The company's international gross margin improved by 46 basis points to 21.4%, alongside a notable increase in operating margin by 107 basis points to 5.7%, driven by lower supply chain costs and enhanced product margins. Additionally, with domestic online revenue representing 39.5% of total domestic sales and robust growth in the tablets and computing categories, Best Buy is well-positioned for continued growth, bolstered by recent investments in e-commerce fulfillment.

Best Buy Co. anticipates slightly negative comparable store sales for the first quarter, alongside an adjusted EBIT margin of approximately 3.40%, indicating a potential double-digit decline year-over-year. The company has reported significant weaknesses in its appliance, entertainment, and consumer electronics categories, which were not fully offset by growth in computing and mobile phone sales. Furthermore, with an expected decrease in earnings per share for 2025 to approximately $6.00 due to these trends and the pressure of tariffs, a negative outlook for the stock is warranted based on these fundamental metrics.