Truist Securities initiated Best Buy(BBY:NYE) with a Hold rating an a $108 target

STA Research
by: STA Research

Truist Securities initiated coverage of Best Buy with a hold rating of  $108 on the electronic’s retailer’s stock.

Based on the Best Buy Co. Inc. stock forecasts from 10 analysts, the average analyst target price for Best Buy Co. Inc. is USD 138.45 over the next 12 months. Best Buy Co. Inc.’s average analyst rating is. Stock Target Advisor’s own stock analysis of Best Buy Co. Inc. is Bullish, which is based on 10 positive signals and 3 negative signals. At the last closing, Best Buy Co. Inc.’s stock price was USD 102.68. Best Buy Co. Inc.’s stock price has changed by -0.32% over the past week, -1.14% over the past month and -9.31% over the last year.

Best Buy Co. Inc. is an American company that operates in the American and Canadian markets  selling various electronics products.  This week, several American Best Buy retail stores have had to close their business due to a labour shortage caused by Covid and labour issues.

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk-adjusted returns

This stock has performed well, on a risk-adjusted basis, compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile.

Low volatility

The stock’s annual returns have been stable and consistent compared to its sector peers (for a hold period of at least 12 months) and are in the top quartile. Although stability is good, also keep in mind it can limit returns.

Underpriced on a cash flow basis

The stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior return on equity

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Underpriced on a free cash flow basis

The stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior Dividend Growth

This stock has shown top quartile dividend growth in the previous 5 years compared to its sector

 

What we don’t like:

Below median total returns

The company has underperformed its peers on annual average total returns in the past 5 years.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

 

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