Update shared on 27 Nov 2025
Fair value Increased 3.16%Best Buy's fair value estimate has increased from $81.38 to $83.95. Analysts cite strong execution, market share gains, and an improved earnings outlook as primary drivers for the upward revision in price targets.
Analyst Commentary
Recent street research reflects a balanced view of Best Buy's prospects, with several analysts raising price targets and emphasizing both the company's operational strengths and areas of caution. Valuation adjustments are largely grounded in Best Buy's ongoing execution, innovation pipeline, and evolving industry conditions.
Bullish Takeaways- Bullish analysts highlight Best Buy's strong execution and consistent market share gains in the consumer electronics space, supporting higher price targets.
- Initiatives around new product categories and retail media operations are seen as key drivers of future earnings growth and expanding profit streams.
- Recent earnings beats and improved comparable sales, particularly in computing, mobile, and gaming, reinforce the company's ability to outperform expectations, even in a challenging retail environment.
- Long-term potential for higher-margin category recovery and persistent cost discipline are expected to underpin sustainable EPS growth. Some view alternative profit channels as underappreciated by the market.
- Bearish analysts remain cautious due to slowing trends in November and tough year-over-year comparisons, which may temper near-term momentum despite recent improvements.
- The lack of a formal full-year outlook increase despite strong quarterly performance signals continued caution regarding consumer demand and potential promotional pressures.
- Some analysts note that expected margin pressures from lower-margin categories and possible tariff impacts could weigh on the pace of future earnings accretion.
- Valuations are generally seen as fair, with more significant upside dependent on meaningful recovery in higher-margin product segments and further evidence of sustainable market share gains.
What's in the News
- Best Buy has completed the repurchase of 23,987,521 shares, totaling $1.92 billion since March 2022. This includes 465,032 shares bought between August and November 2025 (Buyback Tranche Update).
- Reported $171 million in goodwill and intangible asset impairments for the third quarter ended November 2025 (Impairments/Write Offs).
- Raised fiscal 2026 revenue guidance to a range of $41.65 billion to $41.95 billion. Comparable sales are now expected to grow 0.5% to 1.2% (Corporate Guidance Raised).
- Launched new IKEA shop-in-shop experiences at select Best Buy stores in Texas and Florida, expanding product offerings and creating collaborative retail experiences (Client Announcements).
- VITURE XR Glasses are now available in 200 Best Buy stores across the United States. This marks a major retail milestone for immersive technology products (Client Announcements).
Valuation Changes
- Fair Value Estimate has increased from $81.38 to $83.95, reflecting a moderate upward adjustment.
- Discount Rate has risen slightly from 8.76% to 8.86%, indicating a marginally higher risk premium in the company’s valuation model.
- Revenue Growth Forecast has been raised from 2.05% to 2.22%, underscoring higher expectations for top-line expansion.
- Net Profit Margin projection has remained at 3.33%, indicating a stable outlook for profitability.
- Future Price-to-Earnings (P/E) Ratio has increased from 14.16x to 14.61x, suggesting modestly higher anticipated valuation multiples.
Disclaimer
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