Best Buy (BBY) Stock Forecast & Price Target

Best Buy Co. reported over $41 billion in consolidated sales for 2024, solidifying its position as the largest pure-play consumer electronics retailer in the U.S. The company's gross margin expanded approximately 43 basis points year-over-year, driven by improved product margins and lower supply chain costs, while the international operating margin increased by 107 basis points to 5.7%. Additionally, the domestic tablets and computing categories showed strong growth with comparable sales rising by 6.5%, further affirming a positive trajectory for the company as it navigates a shift towards increased e-commerce fulfillment.

Best Buy Co. is facing a challenging outlook, with management predicting slightly negative comparable sales (comps) for the first quarter and a roughly 3.40% adjusted EBIT margin, indicating a double-digit decline in adjusted EBIT year-over-year. The company's weakest categories include appliances (-11.4%), entertainment (-10.9%), and consumer electronics (-2.2%), which overshadowed growth in computing and mobile phones (+6.5%) and services (+9.9%). Additionally, the potential impacts of tariffs and an overall decrease in domestic adjusted SG&A suggest further pressure on the financial outlook, leading to a revision of 2025 EPS estimates downward to approximately $6.00 from $6.40.