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Best Buy (BBY) Gains But Lags Market: What You Should Know

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In the latest trading session, Best Buy (BBY - Free Report) closed at $120.39, marking a +1.17% move from the previous day. This move lagged the S&P 500's daily gain of 1.49%.

Prior to today's trading, shares of the consumer electronics retailer had lost 0.25% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 5.6% and the S&P 500's loss of 0.62% in that time.

Investors will be hoping for strength from BBY as it approaches its next earnings release, which is expected to be May 27, 2021. On that day, BBY is projected to report earnings of $1.29 per share, which would represent year-over-year growth of 92.54%. Our most recent consensus estimate is calling for quarterly revenue of $10.21 billion, up 19.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.29 per share and revenue of $46.54 billion. These totals would mark changes of -7.84% and -1.53%, respectively, from last year.

Any recent changes to analyst estimates for BBY should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.33% higher. BBY is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, BBY is holding a Forward P/E ratio of 16.32. This represents a premium compared to its industry's average Forward P/E of 14.17.

Also, we should mention that BBY has a PEG ratio of 2.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Consumer Electronics stocks are, on average, holding a PEG ratio of 2.22 based on yesterday's closing prices.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 45, putting it in the top 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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