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Dec 17, 2018
Best Buy (BBY, $54.13) Slumps After Bank of America (BAC, $25.17) Downgrades Ratings

Best Buy (BBY, $54.13) Slumps After Bank of America (BAC, $25.17) Downgrades Ratings

Shares of the American multinational consumer electronics retailer, Best Buy, dropped more than 5% on Monday after Bank of America Merrill Lynch downgraded the stock’s rating to underperform (equivalent of a sell rating) from neutral – citing slowing industry growth trends and declining sales on key product categories such as TVs, Apple products and gaming.

Further, analysts at Bank of American Merrill Lynch slashed their price target by nearly 30% from $70 to $50 a share, after its gloomy December quarterly outlook missed street estimates.

Best Buy reported better-than-expected third quarter earnings by reporting an EPS of 9 cents and sales of $9.59 billion. But shares fell by 5.8% to $52.16 on Monday, thereby taking its losses for the quarter to more than 33% amid the key holiday shopping season.

Consumer electronics, including iPhones and computers, accounts for more than 50% of Best Buy's US revenues. But headwinds pertaining to iPhone sales and a new Apple and Amazon partnership ahead of the holiday shopping season, according to the Bank of America analysts, could further dent the sales figure of the company for the December quarter.

Related Ticker: BBY

BBY in upward trend: price rose above 50-day moving average on September 02, 2026

BBY moved above its 50-day moving average on September 02, 2026 date and that indicates a change from a downward trend to an upward trend. In 30 of 42 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 71%.

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on September 03, 2026. You may want to consider a long position or call options on BBY as a result. In 59 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 67%.

The Moving Average Convergence Divergence (MACD) for BBY just turned positive on September 04, 2026. Looking at past instances where BBY's MACD turned positive, the stock continued to rise in 37 of 60 cases over the following month. The odds of a continued upward trend are 62%.

Following a +3.15% 3-day Advance, the price is estimated to grow further. Considering data from situations where BBY advanced for three days, in 204 of 305 cases, the price rose further within the following month. The odds of a continued upward trend are 67%.

BBY may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Bearish Trend Analysis

The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where BBY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.

The Aroon Indicator for BBY entered a downward trend on September 02, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

The Tickeron Price Growth Rating for this company is 11 (best 1 - 100 worst), indicating outstanding price growth. BBY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 18 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.984) is normal, around the industry mean (4.068). P/E Ratio (15.108) is within average values for comparable stocks, (35.701). Projected Growth (PEG Ratio) (1.699) is also within normal values, averaging (1.345). Dividend Yield (0.042) settles around the average of (0.035) among similar stocks. P/S Ratio (0.456) is also within normal values, averaging (1.069).

The Tickeron SMR rating for this company is 24 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is 78 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is 99 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BBY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.

Notable companies

The most notable companies in this group are Ulta Beauty (NASDAQ:ULTA), Best Buy Company (NYSE:BBY), Tractor Supply Co (NASDAQ:TSCO), Five Below (NASDAQ:FIVE), GameStop Corp (NYSE:GME), Bath & Body Works (NYSE:BBWI), RH (NYSE:RH), 1-800-FLOWERS.COM (NASDAQ:FLWS).

Industry description

The specialty stores sector includes companies dedicated to the sale of retail products focused on a single product category, such as clothing, carpet, books, or office supplies. A specialty store could face intense competition from big-box departmental chains, and therefore offering an adequate collection of the product type it specializes in is key in maintaining/growing its market.

Market Cap

The average market capitalization across the Specialty Stores Industry is 4.21B. The market cap for tickers in the group ranges from 4.65K to 52.32B. ANCTF holds the highest valuation in this group at 52.32B. The lowest valued company is SIMPQ at 4.65K.

High and low price notable news

The average weekly price growth across all stocks in the Specialty Stores Industry was -4%. For the same Industry, the average monthly price growth was -7%, and the average quarterly price growth was -1%. ASO experienced the highest price growth at 23%, while FLWS experienced the biggest fall at -19%.

Volume

The average weekly volume growth across all stocks in the Specialty Stores Industry was -19%. For the same stocks of the Industry, the average monthly volume growth was -74% and the average quarterly volume growth was -24%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 48
P/E Growth Rating: 61
Price Growth Rating: 61
SMR Rating: 63
Profit Risk Rating: 89
Seasonality Score: -27 (-100 ... +100)
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published General Information

General Information

a retailer of consumer electronics, entertainment software and appliances

Industry SpecialtyStores

Profile
Details
Industry
Electronics Or Appliance Stores
Address
7601 Penn Avenue South
Phone
+1 612 291-1000
Employees
82000
Web
https://www.bestbuy.com
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Best Buy (BBY, $54.13) Slumps After Bank of America (BAC, $25.17) Downgrades Ratings