Why Is Best Buy (BBY) Stock Down Today?

Electronics retailer and meme-stock favorite Best Buy (NYSE:BBY) is down today after a report indicating lower foot traffic. BBY stock is trending down about 5% heading into market close.

Image of Best Buy (BBY) logo on storefront during daytime. retail stocks
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What should investors know about this latest Best Buy news?

Well, recent data from location-tracking company SafeGraph pointed out that Best Buy’s in-store traffic was 7% lower than last year for the week ending March 26. This appears to be the main justification for BBY’s drop today.

Analysts are apparently watching the retailer closely for signs of a discretionary spending slowdown that could take root in the economy going forward. Indeed, amid near-record-high gas prices, inflation concerns and impending interest rate hikes, consumer spending is top of mind for many investors.

What else do you need to know about Best Buy right now?

BBY Stock Slips Two Days in a Row

Unfortunately, today’s drop comes as only the latest bad omen for Best Buy. On Wednesday, BBY fell about 3% over the course of the day, leaving the stock down roughly 8% in just two days.

Best Buy is likely hoping for some renewed attention as part of World Backup Day. The commercial holiday taking place today has meant a number of sales of storage devices. Both Amazon (NASDAQ:AMZN) and Best Buy have showed up in full force with a number of deals across several different kinds of memory.

Best Buy remains a tenuous stock in many investors’ minds. The company is still trading at elevated levels stemming from the meme-stock boom last year.

However, some, like JPMorgan analyst Christopher Horvers, believe there remains some untapped potential in the company. Horvers raised the price target on BBY to $115 from $107, while maintaining a “neutral” rating.

“Our rating is balanced by BBY’s strong execution, it being the last company standing in the sector, and its key vendors’ high dependence on BBY in the US marketplace as a counterbalance to AMZN and WMT. In addition, its strong FCF typically drives ~$1B in share repurchases per year.”

Will Horvers’ price target come to fruition? Only time will tell.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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