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Bull of the Day: Best Buy (BBY)


For awhile there, today’s Bull of the Day was having a tough time keeping up with competition from unconventional online retailers. However through a nimble business plan and an increased online presence, this company has begun to turn things around and get back on the path to success.

I’m talking, of course, about Best Buy (BBY). A disastrous 2012 saw the electronics retailer in the dumps. Amazon (AMZN) was becoming bigger and bigger in the marketplace and Best Buy started to fade away. But rather than shrink away into the night, Best Buy management circled the wagons and got the retailer back on track. The same company that put Circuit City out of business has showed plenty of resilience.

My favorite chart to use to analyze stocks is our Price, Consensus and EPS Surprise Chart at Zacks. In one easy chart I can read price, volume, earnings beats and the evolution of our Zacks Consensus Estimate over time. You can clearly the growth in EPS year over year and the overall trend of earnings estimates over time. For Best Buy, the story has been earnings growth for the last couple of years. Further, analysts have been increasing their earnings estimates throughout the course of the year.

It’s these increasing earnings estimates that are leading to the Zacks Rank #1 (Strong Buy) rating on Best Buy. A big reason for the rating is we’ve seen eleven analysts increase their estimates for the current year, while 10 have followed suit for next year. The result has pushed up our Zacks Consensus Estimate from $2.86 to $3.04 for the current year and next year’s numbers up from $3.04 to $3.19 over the last sixty days.

Best Buy is about a month away from reporting earnings. When they do, our Zacks Consensus Estimates are calling for 47 cents, up from 45 cents just sixty days ago.

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