Update shared on 07 Nov 2025
Fair value Increased 0.83%Best Buy's analyst price target has increased from $88 to $95, as analysts highlight stronger gross margin prospects and renewed confidence in alternative profit streams. This is supporting a more favorable business outlook.
Analyst Commentary
Recent commentary from Wall Street has shown a dynamic mix of optimism and caution regarding Best Buy's business outlook and stock performance. Analysts continue to weigh in on factors influencing the company's valuation, future growth, and execution capabilities.
Bullish Takeaways
- Bullish analysts have raised price targets to as high as $95, citing the strength of Best Buy's retail media organization and leadership hiring. These factors are expected to support gross margin expansion and reshape investor sentiment.
- New profit streams, including Best Buy Ads and an expanded digital marketplace, are seen as catalysts for long-term earnings growth and an improved business model beyond traditional retail operations.
- Recent earnings results were ahead of consensus. Comparable sales momentum and strong back-to-school demand in computing and gaming categories contributed to solid financial performance.
- Ongoing investments in e-commerce infrastructure, along with management's demonstrated ability to adapt and launch new initiatives, provide confidence in Best Buy's ability to capture growth opportunities. This is particularly relevant in fast-evolving technology segments such as artificial intelligence-related devices.
Bearish Takeaways
- Some bearish analysts maintain a cautious approach and keep neutral or hold ratings despite solid quarterly results. Their stance reflects concerns over the sustainability of recent trends.
- The margin outlook for the remainder of the year faces potential pressure from a shift toward lower margin categories such as gaming and computing, as well as possible tariff impacts and increased promotional activities.
- While expansions in digital and alternative channels are promising, there is caution about near-term volatility and execution risks as Best Buy transitions its business model and navigates competitive challenges.
- Macroeconomic uncertainties and evolving consumer behaviors introduce further risk to Best Buy's outlook. These factors warrant a measured approach to any upward adjustments in guidance or valuation.
What's in the News
- IKEA U.S. and Best Buy have launched an "IKEA at Best Buy" immersive shopping experience at select stores in Texas and Florida. More locations will open soon, with exclusive giveaways for opening day visitors. (Client Announcements)
- VITURE XR Glasses, featuring cinematic-grade SONY micro-OLED displays, are now available for hands-on demo and purchase at 200 Best Buy stores nationwide. This marks a significant expansion in in-store extended reality experiences. (Client Announcements)
- Hohem's advanced AI-powered gimbals, including iSteady V3 and iSteady M7, have launched on BestBuy.com and at select US and Canada stores, giving content creators new tools and in-store experiences. (Client Announcements)
- Best Buy is introducing a vastly expanded digital marketplace for the holiday season, adding ten times more products, new categories, the latest tech experiences, and immersive in-store showcases for major brands and innovations. (Product-Related Announcements)
- The company completed a significant share repurchase, buying back nearly one million shares for $66.58 million as part of an ongoing $1.88 billion buyback program. (Buyback Tranche Update)
Valuation Changes
- Fair Value: Increased slightly from $80.71 to $81.38. This reflects modest upward revisions in economic outlook and company performance.
- Discount Rate: Rose slightly from 8.71% to 8.76%. This indicates a marginally higher risk premium applied to future cash flows.
- Revenue Growth: Edged up marginally from 2.04% to 2.05%. This suggests slightly improved expectations for top-line expansion.
- Net Profit Margin: Declined fractionally from 3.33% to 3.33%. This points to a stable but slightly softened profitability outlook.
- Future P/E: Increased from 14.02x to 14.16x. This reflects a small growth in market expectations for future earnings multiples.
Disclaimer
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