Best Buy Could Be Gearing Up For Comeback, Analyst Says

Core Viewpoint - Best Buy is at a critical point as it adapts to changing technology and consumer habits, with analysts observing its strategic moves and new product offerings that could influence its future trajectory [1] Financial Performance - The company's results are stabilizing and are expected to return to growth in the second half of 2025, supported by new product launches like the Nintendo Switch 2 [2] - For Q2 2025, EPS is projected at $1.21, slightly above the consensus of $1.20, with a sales decline of 1.4% to $9.2 billion and an operating margin contraction of approximately 40 basis points to 3.7% due to tariff pressures, inflation, and higher rates [3] Future Outlook - The 2025 EPS estimate is maintained at $6.25, above the consensus of $6.16, with comparable sales expected to decline by 0.2% and an operating margin of 4.3%. For 2026, EPS is expected to rise to $6.78 with comparable sales growth of 1.6% and operating margin expansion to 4.4% [4] - Factors driving Best Buy's rebound include the replacement cycle for pandemic-era purchases, product innovation in AI, and growth in higher-margin areas such as advertising, marketplace, loyalty, and health services [4] Risk Management - Despite high tariff risks, Best Buy's diversified sourcing strategies, including shifting production and consolidating volumes, are aimed at mitigating the impact [5] Stock Performance - At the time of publication, Best Buy shares were up 3.99% at $75.30 [5]