Consumer electronics retailer Best Buy (BBY) is scheduled to report its results for the third quarter of Fiscal 2025 on November 26. BBY shares have risen more than 14% year-to-date due to the company’s resilient performance despite a tough business backdrop. Wall Street expects Best Buy to deliver adjusted EPS (earnings per share) of $1.29, in line with the prior-year quarter’s earnings.
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Analysts expect Q3 FY25 revenue to decline 1.3% year-over-year to $9.63 billion. Following robust performance during the COVID-19 pandemic, Best Buy struggled due to subdued demand for consumer electronics amid tough macro conditions. While announcing its Q2 FY25 results in August, the company said that it expects comparable sales to decline by about 1.0% in Q3 FY25.
Analysts’ Views Ahead of Best Buy’s Q3 Earnings
Ahead of the results, Bank of America analyst Elizabeth Suzuki reaffirmed a Sell rating on BBY stock with a price target of $80. The analyst expects Best Buy to report EPS of $1.26 and a comparable sales decline of 1%. Suzuki expects computing devices and services to partly offset the softness in appliances and home theater categories.
Additionally, Bank of America’s aggregated credit and debit card data indicates a slowdown in October comparable sales, as value-conscious customers may have delayed purchases to wait for the Holiday season offers.
Meanwhile, Telsey analyst Joseph Feldman reiterated a Buy rating on Best Buy stock with a price target of $115. The analyst expects the company to witness continued softness in its sales, as the demand for discretionary items, mainly big-ticket categories, continues to be sluggish. Feldman expects Best Buy to return to growth in the first half of the calendar year 2025, following many quarters of negative comparable sales.
The analyst expects this improvement in the top line to be driven by new products and the beginning of the replacement cycle, mainly for products purchased in 2019-2020. He also anticipates that the company will gain from artificial intelligence (AI) enhancements in products and higher-margin services. Overall, Feldman believes that BBY is approaching a positive inflection in sales and profits.
Options Traders Anticipate a Major Move
TipRanks’ Options tool offers a quick way to gauge what options traders anticipate from the stock following its earnings report. The expected earnings move is calculated using the at-the-money straddle of the options set to expire closest to the announcement. While this may sound complex, the tool handles the calculations for you.
Currently, it indicates that options traders are predicting about an 8.8% swing in either direction in BBY stock.
Is Best Buy Stock a Buy or Sell?
Wall Street is cautiously optimistic on Best Buy stock, with a Moderate Buy consensus rating based on nine Buys, eight Holds, and one Sell recommendation. The average BBY stock price target of $106.31 implies 18.7% upside potential.
