Best Buy (NYSE:BBY) Shares Gap Up on Better-Than-Expected Earnings

Best Buy Co., Inc. (NYSE:BBY) shares gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $64.54, but opened at $69.70. Best Buy shares last traded at $72.9780, with a volume of 2,922,364 shares trading hands.

The technology retailer reported $1.28 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.22 by $0.06. Best Buy had a net margin of 2.56% and a return on equity of 49.17%. The firm had revenue of $8.94 billion during the quarter, compared to analyst estimates of $8.82 billion. During the same quarter in the prior year, the firm posted $1.15 earnings per share. Best Buy’s quarterly revenue was up 1.9% on a year-over-year basis.

Best Buy Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, April 14th. Stockholders of record on Tuesday, March 24th were paid a $0.96 dividend. This is a positive change from Best Buy’s previous quarterly dividend of $0.95. The ex-dividend date of this dividend was Tuesday, March 24th. This represents a $3.84 annualized dividend and a dividend yield of 5.2%. Best Buy’s dividend payout ratio is currently 76.19%.

Best Buy News Roundup

Here are the key news stories impacting Best Buy this week:

• Positive Sentiment: Q1 earnings and revenue both beat estimates. Best Buy’s top- and bottom-line outperformance suggests demand was better than expected and supports the stock’s move higher.
• Positive Sentiment: Comparable sales turned positive. The 2% enterprise comps growth signals that the retailer may be stabilizing after a sales slump, which is encouraging for investors watching for a turnaround. Best Buy Reports First Quarter Results
• Positive Sentiment: Key product categories strengthened. Management cited gaming and computing as growth drivers, indicating healthier consumer demand in higher-margin electronics categories. Best Buy beats on top and bottom lines as retailer aims to reinvigorate sales
• Neutral Sentiment: Appliances were a weak spot. That offset some of the upside, but it did not outweigh the stronger categories in this quarter. Best Buy surges on earnings beat and strong sales growth

Wall Street Analyst Weigh In

Several analysts have recently commented on BBY shares. Daiwa Securities Group reduced their price target on shares of Best Buy from $80.00 to $68.00 and set a “neutral” rating on the stock in a research report on Thursday, March 5th. Wedbush increased their price objective on Best Buy from $7.00 to $8.00 and gave the stock an “outperform” rating in a research report on Tuesday, April 28th. Telsey Advisory Group cut their target price on Best Buy from $95.00 to $80.00 and set an “outperform” rating for the company in a research note on Wednesday, March 4th. Evercore set a $65.00 target price on Best Buy in a research report on Tuesday, April 14th. Finally, Citigroup decreased their price target on Best Buy from $69.00 to $60.00 and set a “neutral” rating on the stock in a research note on Tuesday, May 12th. Nine investment analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, Best Buy has an average rating of “Hold” and a consensus price target of $70.25.

Insider Activity

In other Best Buy news, CAO Mathew Watson sold 3,298 shares of the business’s stock in a transaction on Monday, March 23rd. The shares were sold at an average price of $64.02, for a total value of $211,137.96. Following the completion of the transaction, the chief accounting officer owned 23,192 shares in the company, valued at $1,484,751.84. The trade was a 12.45% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, CEO Corie S. Barry sold 42,869 shares of the company’s stock in a transaction on Monday, March 23rd. The stock was sold at an average price of $64.02, for a total value of $2,744,473.38. Following the sale, the chief executive officer directly owned 523,138 shares in the company, valued at $33,491,294.76. This represents a 7.57% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 77,247 shares of company stock worth $4,945,353 over the last 90 days. Company insiders own 0.47% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of BBY. Vanguard Group Inc. increased its stake in Best Buy by 2.4% in the third quarter. Vanguard Group Inc. now owns 23,947,415 shares of the technology retailer’s stock valued at $1,810,904,000 after purchasing an additional 552,360 shares during the period. Concurrent Investment Advisors LLC raised its holdings in shares of Best Buy by 100.6% in the fourth quarter. Concurrent Investment Advisors LLC now owns 70,280 shares of the technology retailer’s stock valued at $4,704,000 after buying an additional 35,239 shares during the last quarter. Bank of New York Mellon Corp boosted its stake in shares of Best Buy by 2.3% during the third quarter. Bank of New York Mellon Corp now owns 1,754,844 shares of the technology retailer’s stock worth $132,701,000 after buying an additional 39,026 shares during the period. Allianz Asset Management GmbH grew its holdings in shares of Best Buy by 5.7% during the third quarter. Allianz Asset Management GmbH now owns 1,639,202 shares of the technology retailer’s stock worth $123,956,000 after buying an additional 89,057 shares during the last quarter. Finally, PFA Pension Forsikringsaktieselskab purchased a new position in shares of Best Buy during the fourth quarter worth about $1,741,000. 80.96% of the stock is owned by institutional investors and hedge funds.

Best Buy Price Performance

The company has a 50-day moving average of $61.74 and a 200-day moving average of $66.83. The company has a debt-to-equity ratio of 0.39, a quick ratio of 0.43 and a current ratio of 1.11. The stock has a market cap of $15.53 billion, a price-to-earnings ratio of 14.57, a PEG ratio of 1.56 and a beta of 1.22.

About Best Buy

Best Buy Co, Inc is a leading North American consumer electronics retailer that sells a broad range of products including computers, mobile phones, televisions and home theater systems, major appliances, smart-home devices, gaming hardware and software, wearables and related accessories. The company operates through a mix of large-format stores, smaller specialty locations and an e-commerce platform, offering national and private-brand merchandise from major consumer-technology manufacturers as well as third-party sellers.

Beyond product retailing, Best Buy provides a suite of services aimed at installation, repair and ongoing technical support.