It was good news for Best Buy (NASDAQ:BBY), as the electronics retailer got an upgrade with analysts. However, the news wasn’t quite as good for Best Buy employees, who faced another round of store closures. Nevertheless, this combination was enough for investors, who sent shares up modestly in Friday afternoon’s trading.
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The upgrade came from JPMorgan, where analysts bumped the stock from Neutral to Overweight and boosted the price target from $89 to $101 per share. JPMorgan analysts had no shortage of reasons for the upgrade, starting with issues of “wallet pull-forward.” JPMorgan figures this is either coming to an end or has already stopped, which means a “soft landing” for electronics installation this year.
Additionally, JPMorgan looks for “deflationary headwinds” in electronics, driving down prices and bringing shoppers back to the table. And, with Best Buy’s margin outlook generally considered “conservative,” the end result suggests that things might well turn out better than expected.
Best Buy Plans to Close 24 Stores in 2024
Then there was a point that usually helps a business, though it’s not so helpful to the employees: plans to close 24 stores in 2024. Another 10 to 15 will likely close after that, reports noted. Which stores are on the block is currently unknown—Best Buy is keeping that information close to the vest right now—but with over 1,000 stores currently operating in the United States alone, it’s a pretty safe bet that even the impacted stores will have fairly close substitutes not too far away.
Reports also suggest the closures may not be complete, as Best Buy is looking to open smaller locations, quite possibly in places where larger branches have closed.
Is Best Buy a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BBY stock based on seven Buys, seven Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 15.18% rally in its share price over the past year, the average BBY price target of $85.50 per share implies 5.11% upside potential.
