Last week’s implosion of big-box retailer Best Buy (BBY) was predictable based on prevailing economic and political winds. Although the company reported solid figures in its most recent fourth-quarter earnings report, the overwhelming concern centered on the Trump administration’s tariffs and the prospect of an ugly trade war. Still, there are signs that the president may be rethinking his approach, potentially offering a lifeline to BBY stock. I’m tentatively bullish on BBY, but only in the short term.
It really comes down to how much the White House believes it can push the needle before even loyal constituents begin to protest, if not publicly than via the ballot box. While President Donald Trump has successfully painted rival Democrats as being ineffective policymakers, no elected official can rely on unlimited reserves of public patience. With the benchmark S&P 500 facing one of the worst slumps in history, Trump appears to be getting the message.
Yes, the administration has talked a tough game about tariffs on key economic partners such as China and Mexico. At the same time, the president has walked back his threats multiple times. Though predicting the next development is difficult, the back-and-forth suggests that some prudence is filtering into the White House. Ultimately, that may be good news for BBY stock, making me near-term bullish.
BBY Stock Could Benefit from Immediate Lessons Learned
Without broader context, BBY stock could have potentially swung higher last week. In Q4, Best Buy delivered adjusted earnings per share of $2.58 on top of revenue of $13.95 billion. These figures beat analysts’ consensus estimates of $2.40 and $13.68 billion, respectively. Unfortunately, muted expectations contributed to BBY’s volatility.
For FY2026, Best Buy anticipates adjusted EPS between $6.20 and $6.60, with revenue between $41.4 billion and $42.2 billion. These figures represent a wider range of outcomes compared to analysts’ consensus view of EPS of $6.60 and sales of $41.81 billion.
What also sparked anxiety among investors is that the above outlook doesn’t account for President Trump’s tariffs. During the earnings conference call, management addressed the elephant in the room, estimating a negative 1% same-store sales impact if the tariffs remain in effect.
Notably, the leadership team stated that the tariffs were “critical” and “highly dynamic,” and it’s no wonder such language was used. China and Mexico represent Best Buy’s two biggest supply chain partners, contributing approximately 55% and 20% of the retailer’s sourced products, respectively. Over the past six months, BBY stock has underperformed the S&P 500 (SPX), potentially setting the stage for a BBY stock price comeback as tariff fears recede and investors breathe a sigh of relief.
It’s no secret that the Trump administration has been aggressive in prosecuting various ills allegedly impacting the nation. At the same time, there is growing evidence of a pragmatic approach undergirding the tariff threats. For example, in late January, the U.S. and Colombia pulled back from a potential trade war by reaching an agreement regarding deported migrants.
As for brewing tensions with Mexico and Canada, President Trump has repeatedly threatened, implemented, and later reversed tariffs. If the administration was truly committed to levies on key economic partners, this back-and-forth would likely not materialize. Essentially, Trump is blinking first on his own tough rhetoric. That would appear to be good news for BBY stock.
Options Market Offers Pragmatic BBY Trading Strategy
Another factor that could favor BBY stock is the statistical trend. Using data going back to January 2019, BBY features a neutral to slightly positive bias. For example, a position entered at the beginning of the week has a 50/50 chance of rising by the end. Over eight weeks, this baseline probability improved to 53.33%.
However, under dynamic conditions—specifically accounting for extreme volatility as defined as a double-digit percentage loss over a one-week period—bullish odds of success tend to be pushed forward. In the first two weeks following an extreme fear event, the bulls historically have enjoyed a higher success ratio than the bears.
Further, assuming the favorable scenario, the projected median return (based on prior empirical pricing data) clocks between roughly 4% and 10% over the next two weeks. With this intelligence in mind, the most daring traders could consider a multi-leg options strategy called the bull call spread.
One intriguing trading idea at this moment is the 80/82 bull spread for the options chain expiring March 21. This transaction involves buying the $80 call and simultaneously selling the $82 call, using the proceeds of the short call sale to partially offset the debit paid for the long call.
BBY stock must reach or exceed the $82 short strike price at expiration for this trade to be fully profitable. This represents a 3.3% move from Friday’s close, which is reasonable based on historical and statistical trends. The fundamental factor of the Trump administration backing off the tariff threats could also be positive for overall sentiment.
Is Best Buy a Good Stock to Buy Now?
Turning to Wall Street, BBY stock has a Moderate Buy consensus rating based on 10 Buys, seven Holds, and one Sell rating over the past three months. The average BBY price target is $92.71 per share, implying ~18% upside potential.
Tariff Uncertainty Creates Short-Term Buying Opportunity
Retail thrives on adaptation, and Best Buy has weathered its share of storms. While tariffs introduce new uncertainties, the company’s track record suggests it can pivot when needed. If the political landscape softens, even marginally, sentiment could shift, providing a tailwind. At the same time, history favors those who recognize opportunity amid the volatility. Statistical trends point to a reasonable case for a rebound. With the market always looking ahead, traders with a decent threshold for market risk may find the specter of Trump’s tariffs as an opportunity in disguise.
Questions or Comments about the article? Write to editor@tipranks.com