Shares of Best Buy (NYSE:BBY) were seen rising in Tuesday’s pre-market after the consumer electronics retailer posted better-than-expected earnings and revenues for the second quarter of the Fiscal Year 2023. The stock remained in the green halfway into the regular trading session.
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While the forecast was adjusted to the company’s warning earlier this month, Best Buy managed to pull off a surprise. Earnings per share stood at $1.54, surpassing analysts’ estimates of $1.27 a share. Further, revenues of $10.33 billion beat Street’s expectation by $80 million.
However, the gross profit margin contracted year-over-year from 23.7% to 22.1%, meaning that the company saw operating deleverage over the past 12 months. This can be attributed to increased promotions and higher supply chain costs.
Investor Sentiment for BBY Stock is Currently Neutral
The sentiment among TipRanks investors is currently neutral. Out of the 729,068 portfolios tracked by TipRanks, 0.5% hold BBY stock. In addition, the average portfolio weighting allocated towards BBY among those who do have a position is 3.54%. This suggests that investors of the company are fairly confident about its future.
However, in the last 30 days, 0.2% of those holding the stock decreased their positions. Nevertheless, the stock’s sentiment is above the sector average, as demonstrated in the following image:
Is BBY Stock a Buy, Hold, or Sell?
BBY has a Hold consensus rating based on five Buys, seven Holds, and three Sells assigned in the past three months. The average BBY stock price target of $77.67 implies 3.4% upside potential.
Takeaway – BBY Stock May Continue Seeing Headwinds
Although Best Buy beat estimates, it’s also worth noting that earnings and revenue fell on a year-over-year basis as the economy begins to slow down. Best Buy is likely to continue facing headwinds going forward as inflation continues eating into consumers’ purchasing power, causing them to shift their spending from discretionary items toward necessities.
