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Best Buy (BBY) Stock Wavers on Analyst Downgrade


  • Telsey Advisory Group analysts downgraded Best Buy (BBY) and lowered their price target on the company’s shares.
  • However, the analysts seem to have a favorable long-term outlook on Best Buy.
  • BBY stock wobbled but stayed close to breakeven in early trading today.
BBY stock - Best Buy (BBY) Stock Wavers on Analyst Downgrade

Source: Ken Wolter / Shutterstock.com

Investors in Best Buy (NYSE:BBY) stock were dealt a blow today when Telsey Advisory Group analysts downgraded BBY stock and reduced their price target on the company’s shares. However, Best Buy’s shareholders didn’t sustain much damage and might actually finish the day with a profit.

Representing the Telsey analyst group, Joseph Feldman reduced his rating on Best Buy shares from “outperform” (which is similar to buy) to “market perform” (which is similar to hold). Furthermore, Feldman lowered his rating on the stock from $88 to $83.

Feldman apparently doesn’t have high hopes for Best Buy in the near term. He expects Best Buy to report fourth-quarter 2022 sales of $14.6 billion, which would be down 10.6% year over year (YOY).

In addition, Feldman provided “lower 2023 forecasts for both sales and profits” for Best Buy. That’s because, in Feldman’s view, Best Buy “is likely to experience a further decline related to the challenging macro trends weighing on discretionary consumer demand, given high inflation and rising interest rates.”

What’s Happening With BBY Stock?

Feldman’s downbeat short-term outlook for Best Buy may have caused BBY stock to wobble in early-morning trading. However, shares were flat to slightly green by 11:00 a.m. Eastern today.

Perhaps financial traders aren’t too worried because Feldman’s longer-term outlook for Best Buy isn’t extremely bearish. Indeed, Feldman envisions Best Buy remaining “one of the better operators” in retail due to such advantages as having a differentiated store and digital experience, as well as efficient operations, solid cash flow generation and a strong management team.

It’s also worth noting that Feldman’s price-target cut to $83 isn’t drastic. BBY stock hovered near $84 this morning, so losing $1 per share wouldn’t be a steep decline.

It’s certainly possible that Best Buy will continue to face macroeconomic challenges in the coming months. However, if Feldman’s outlook turns out to be accurate, Best Buy should be able to weather the economic storm. This happy ending, it seems, is what today’s Best Buy investors are anticipating and hoping for.

On the date of publication, David Moadel did not have (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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

Article printed from InvestorPlace Media, https://investorplace.com/2023/02/best-buy-bby-stock-wavers-on-analyst-downgrade/.

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