Best Buy (BBY) Stock Rising on Price Target Hike

NEW YORK (TheStreet) -- Shares of Best Buy Co. (BBY) are increasing 0.06% to $35.13 in Friday's early morning trading after analysts at Jefferies raised its price target to $49 from $46 and maintained their "buy" rating.

Analysts said that the company's market position has improved, shifting from stabilizing the business to playing offense as large pools of market share are up for grabs.

"Strong inventory management around port issues and good in-store execution of its new labor model translated to better than expected sales, which outpaced competitors," they added.

This action follows the company's first quarter results released yesterday. The company reported revenue of $8.56 billion, or 37 cents per share this quarter, compared to revenue of $8.64 billion, or 35 cents per share in the same quarter last year.

While revenue decreased from the same quarter a year ago, it still beat consensus estimates. Analysts had expected earnings of 29 cents per share and a revenue of $8.46 billion, according to analysts at Thomson Reuters.

Best Buy president and CEO Hubert Joly said yesterday during the earnings call that the earnings exceeded their expectations during the quarter due to a stronger-than-expected performance in the domestic business.

TheStreet Ratings team rates BEST BUY CO INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BEST BUY CO INC (BBY) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, solid stock price performance, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 77.1% when compared to the same quarter one year prior, rising from $293.00 million to $519.00 million.
  • BBY's revenue growth trails the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 1.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 72.94% and other important driving factors, this stock has surged by 33.82% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BBY should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 50.77% to $1,161.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.66%.
  • You can view the full analysis from the report here: BBY Ratings Report

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