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Best Buy's Margin Story Gets Even Better, Analysts Say

MarketDash Editorial Team
11 days ago
Wall Street is getting more bullish on Best Buy after a strong earnings beat, pointing to expanding margins driven by vendor partnerships, membership programs, and marketplace growth as reasons for optimism.

Best Buy Co., Inc. (BBY) shares are climbing Wednesday after the electronics retailer beat earnings expectations and multiple analysts raised their price targets, pointing to an increasingly attractive margin story.

The company reported third-quarter fiscal 2026 sales of $9.67 billion on Tuesday, up 2.4% year-over-year and ahead of the $9.59 billion consensus. More importantly, Best Buy raised its full-year guidance, now projecting adjusted EPS of $6.25-$6.35 (previously $6.15-$6.30) versus $6.26 consensus, with sales expected between $41.65 billion and $41.95 billion.

What Analysts Are Saying

Guggenheim analyst Steven Forbes maintained a Buy rating with a $90 price target, noting that the quarterly results beat his estimates and marked the second consecutive period of positive comparable sales. What's particularly encouraging, Forbes points out, is that management indicated unit volume—not pricing—largely drove the growth. That's a meaningful distinction because it suggests real demand rather than just price inflation.

Forbes sees potential for low single-digit comp growth in the near to mid-term and says the results reinforce his long-term earnings outlook. The key driver? Emerging profit streams gaining traction, combined with strong vendor support enhancing margins.

Telsey analyst Joseph Feldman was even more enthusiastic, raising his price target to $95 from $90 while keeping an Outperform rating. He views Best Buy as effectively executing its strategy and expanding market share in consumer electronics by driving innovation, leveraging scale and vendor partnerships, controlling costs, and operating efficiently.

Looking ahead, Feldman says growth in higher-margin businesses like membership programs, marketplace operations, and advertising initiatives—combined with product innovation and replacement cycles—should support positive comps and earnings. He raised his 2025 EPS estimate to $6.35 from $6.25, reflecting higher total comps of 1% and stable operating margin at 4.3%. For 2026, he now expects EPS of $6.83 with operating margin expanding approximately 12 basis points to 4.4%.

Best Buy shares were up 1.73% at $81.04 Wednesday.

Back to News

Best Buy's Margin Story Gets Even Better, Analysts Say

MarketDash Editorial Team
11 days ago
Wall Street is getting more bullish on Best Buy after a strong earnings beat, pointing to expanding margins driven by vendor partnerships, membership programs, and marketplace growth as reasons for optimism.

Best Buy Co., Inc. (BBY) shares are climbing Wednesday after the electronics retailer beat earnings expectations and multiple analysts raised their price targets, pointing to an increasingly attractive margin story.

The company reported third-quarter fiscal 2026 sales of $9.67 billion on Tuesday, up 2.4% year-over-year and ahead of the $9.59 billion consensus. More importantly, Best Buy raised its full-year guidance, now projecting adjusted EPS of $6.25-$6.35 (previously $6.15-$6.30) versus $6.26 consensus, with sales expected between $41.65 billion and $41.95 billion.

What Analysts Are Saying

Guggenheim analyst Steven Forbes maintained a Buy rating with a $90 price target, noting that the quarterly results beat his estimates and marked the second consecutive period of positive comparable sales. What's particularly encouraging, Forbes points out, is that management indicated unit volume—not pricing—largely drove the growth. That's a meaningful distinction because it suggests real demand rather than just price inflation.

Forbes sees potential for low single-digit comp growth in the near to mid-term and says the results reinforce his long-term earnings outlook. The key driver? Emerging profit streams gaining traction, combined with strong vendor support enhancing margins.

Telsey analyst Joseph Feldman was even more enthusiastic, raising his price target to $95 from $90 while keeping an Outperform rating. He views Best Buy as effectively executing its strategy and expanding market share in consumer electronics by driving innovation, leveraging scale and vendor partnerships, controlling costs, and operating efficiently.

Looking ahead, Feldman says growth in higher-margin businesses like membership programs, marketplace operations, and advertising initiatives—combined with product innovation and replacement cycles—should support positive comps and earnings. He raised his 2025 EPS estimate to $6.35 from $6.25, reflecting higher total comps of 1% and stable operating margin at 4.3%. For 2026, he now expects EPS of $6.83 with operating margin expanding approximately 12 basis points to 4.4%.

Best Buy shares were up 1.73% at $81.04 Wednesday.