- BBY stock jumps more than 3% after earnings.
- The retail company's revenue was better than analysts expected.
- Best Buy's full-year outlook was reduced.
Best Buy (BBY) stock is up 3.3% at $75 in the first half hour of Tuesday's session after the retailer reported better-than-anticipated sales figures. Adjusted earnings per share (EPS) came in at $1.57, a penny up on Wall Street consensus. More importantly revenue of $10.65 billion beat forecasts by $220 million.
Also read: SNAP craters 31% after announcing revenue slowdown
The retail sector has been in a slump of late after both Target (TGT) and Walmart (WMT) posted discouraging quarters and forecast a slowdown in their respective businesses. In both cases, management blamed expanding inflation and injured supply chains for affecting their bottom lines, and both companies said inflation was causing consumers to reduce spending.
Both revenue and same store sales at Best Buy dropped 8.5% YoY, but the market has mostly ignored this since analysts were expecting worse figures and BBY stock had already sunk below $70 last week in the wake of the retail sector's major rout caused by Walmart and Target. There always is a benefit to reporting late.
The negative aspect of the report was Best Buy reducing its full-year outlook. However, this failed to move the stock as a negative outlook is now baked into nearly every retail stock. For the full fiscal year, Best Buy reduced its revenue forecast midpoint from $50.05 billion to $49.1 billion. Management now expects adjusted EPS at $8.70 compared to the previous forecast of $9.
Best Buy Stock Forecast: BBY bulls eye gap-closing at $82
BBY stock is presently trading above the 9-day moving average at $72.80. In the premarket, BBY briefly touched the 20-day moving average at $79.47. This moving average is the immediate target, but BBY will likely remain between these two averages for this week as it builds out a base. Ultimately the bulls' goal is to close the May 18 gap down by testing $82.
That is unlikely to happen until a general market turnaround is in the works. With the S&P 500 down 1.3% and the Nasdaq down 3.4%, there is not enough optimism for a push higher at present. Bulls should watch out if BBY share price drops back below the 9-day moving average. In that case it is time to escape.
BBY 4-hour chart
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.