Can Best Buy’s Stock Rebound After An 18% Drop?

+0.52%
Upside
89.16
Market
89.62
Trefis
BBY: Best Buy logo
BBY
Best Buy

Best Buy’s stock (NYSE: BBY) has declined by 18% in the last five trading days (one week). In comparison, the broader S&P500 index declined only marginally over the same period. The company’s stock fell despite posting a better-than-expected quarter against tough pandemic comparables in the fiscal third quarter. This was likely due to issuing a tepid sales forecast for the all-important holiday shopping season. The company’s management expects revenue of $16.4 billion to $16.9 billion, with comparable sales potentially falling as much as 2% and adjusted gross margin declining by roughly 30 basis points in the fiscal Q4.

In Q3, Best Buy’s revenue rose marginally year-over-year (y-o-y) to $11.9 billion and its adjusted earnings per share grew 1% y-o-y to $2.08. The company beat on both top and bottom line in the quarter. Further, BBY’s comparable sales in the U.S. were up 2% (compared to -1.3% consensus), and its international sales were down 3% (vs. -5.3% consensus). The retailer benefited from more people continuing to sustainably work and entertain at home during this time. While customers returned to stores, digital sales were still more than double pre-pandemic levels, and phone, chat, and in-home sales also continued to grow y-o-y.

Now, is BBY stock still poised to grow? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 61% chance of a rise in BBY stock over the next month (twenty-one trading days). See our analysis on BBY’s Stock Chance Of Rise for more details.

Relevant Articles
  1. Down 7% This Year, Will Best Buy Stock Recover Following Q1 Results?
  2. Flat Since The Beginning of 2023, What’s Next For Best Buy’s Stock Post Q4 Results?
  3. Down 15% This Year, Where Is Best Buy Stock Headed Post Q3?
  4. What To Expect From Best Buy’s Stock Post Q2?
  5. What’s Happening With Best Buy’s Stock?
  6. What’s Next After a 17% Fall in Best Buy’s Stock?

And if you are considering BBY’s stock as an investment option over a longer time frame, you can explore our forecast for Best Buy’s Valuation

[1] Returns of -18% or lower over five-day period in 12 times out of 2515 (0%); Stock rose in the next five days in five of these 12 instances (42%)

[2] Returns of -18% or lower over ten-day period in 38 times out of 2515 (2%); Stock rose in the next ten days in 22 of these 38 instances (58%)

[3] Returns of -8.4% or lower over twenty-one-day period in 378 times out of 2515 (15%); Stock rose in the next twenty-one days in 232 of these 378 instances (61%)

Also, Best Buy Peer Comparisons summarizes how the company fares against peers on metrics that matter.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Nov 2021
MTD [1]
2021
YTD [1]
2017-21
Total [2]
 BBY Return -8% 11% 160%
 S&P 500 Return 1% 24% 108%
 Trefis MS Portfolio Return -2% 48% 302%

[1] Month-to-date and year-to-date as of 11/30/2021
[2] Cumulative total returns since 2017

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates