Best Buy has already been beaten down this year, with its stock falling more than 30%.
Much of the damage has been done over the past six weeks, as retail stocks have tumbled amid growing concerns about an economic slowdown. The risk of further downside to sales growth will keep the stock from rebounding sharply, according to Bank of America. "On our lowered FY24E of $10.08, the stock currently trades at a P/E of about 7x.
However, if consumer spending behavior continues to favor 'needs' over 'wants' and BBY earnings revert to pre-COVID levels its P/E would be around 9x, consistent with low-growth brick & mortar retailers and our valuation basis for our $90 [price target]," Suzuki wrote. That $90 price target is down from $110 per share previously. The new target is nearly 30% above where the stock closed on Monday. — CNBC's Michael Bloom contributed to this report.
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