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Best Buy (BBY) Gains As Market Dips: What You Should Know

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Best Buy (BBY - Free Report) closed the most recent trading day at $83.18, moving +0.06% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, added 1.58%.

Coming into today, shares of the consumer electronics retailer had lost 0.6% in the past month. In that same time, the Retail-Wholesale sector lost 2.03%, while the S&P 500 gained 0.84%.

Best Buy will be looking to display strength as it nears its next earnings release, which is expected to be March 2, 2023. The company is expected to report EPS of $2.09, down 23.44% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $14.75 billion, down 9.88% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Best Buy. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. Best Buy is currently a Zacks Rank #3 (Hold).

In terms of valuation, Best Buy is currently trading at a Forward P/E ratio of 12.2. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 12.2.

Investors should also note that BBY has a PEG ratio of 0.69 right now. 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. The Retail - Consumer Electronics was holding an average PEG ratio of 0.69 at yesterday's closing price.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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