TLDR:
– UBS upgraded Best Buy stock to a buy rating and raised its price target to $106.
– Analysts cite multiple reasons for potential upside, including a rebound in housing and new product categories.
– Best Buy expected to benefit from AI-enabled device upgrade cycle and high-end offerings like Microsoft’s new laptops.
– Home appliances sales could see a boost from more people buying houses.
– Best Buy stock has room to grow despite recent gains.
UBS recently upgraded Best Buy stock to a buy rating and raised its price target to $106. The analysts believe that there are multiple paths to potential upside for the stock, including a rebound in housing, growing sales in newer product categories, and a broader electronics replacement cycle. Best Buy is expected to benefit from an artificial intelligence-fueled upgrade cycle for PCs and high-end offerings like Microsoft’s new AI-enabled laptops.
In addition, UBS pointed out that Best Buy’s home appliances sales could see a boost from more people buying houses. The analysts estimate that 40%-45% of Best Buy’s assortment holds a moderate to strong correlation to housing turnover. With recent comments from Best Buy indicating improvements in sales of TVs and major appliances, UBS expects sequential improvement from here.
Overall, UBS and the CNBC Investing Club agree that these tailwinds should drive a nice recovery in Best Buy sales. Despite recent gains, Best Buy stock still has room to grow, with potential for a significant increase in share price. It’s worth noting that Best Buy is expected to benefit from AI-infused devices and new high-end offerings in the coming months.