Further Share Gains Drive Best Buy (BBY) Results, PT to $47 - UBS

UBS analyst Michael Lasser lifted his price target on Best Buy (NYSE: BBY) to $47.00 (from $38.00) but maintained a Neutral rating following Q3 results which showed further share gains.

Lasser commented, "In the face of a declining category, BBY continues to outperform & take share. Its 3Q domestic SSS of 1.8% outperformed the industry (as defined by NPD) by 490 bps, an acceleration from the 400 bp gain in 2Q. We think it is taking share from a number of competitors for several reasons. It has developed a differentiated in-store experience through stores-within-stores. By playing at the high-end of the market, it is probably driving better attach rates & building bigger baskets. Also, its omnichannel investments have been paying off as its eCommerce sales have grown 24% for the last 3 Qs on an already strong base. These have occurred during a stable pricing environment. In 2 of the last 3 editions of our quarterly pricing surveys, BBY has been cheaper than WMT & within 250 bps of AMZN. While it can't take 500 bps of share ad infinitum, we believe it's well positioned to grow faster than the category for an extended period."

The analyst model $3.55 in EPS for FY'18.

For an analyst ratings summary and ratings history on Best Buy click here. For more ratings news on Best Buy click here.

Shares of Best Buy closed at $45.99 yesterday.

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