Best Buy slides on Goldman double downgrade to 'sell'

Best Buy

13/04/2026 14:18

Updates with analyst commentary

** Best Buy's BBY.N shares down 4.9% premarket to $59.31 after Goldman Sachs downgrades to 'sell' from 'buy'

** "While Best Buy will likely see a benefit to SSS (same-store sales) from a pull-forward of PC demand and higher tax returns in Q1, we think there will be risk to sales post Q1 as higher memory costs start to work their way into the price of laptops and computers," Goldman analyst Kate McShane writes in note

** Margins could compress as consumers potentially trade down to lower-priced SKUs and volume declines as manufacturers prioritize fewer consumer electronic shipments, McShane adds

** McShane cuts PT from $76 to Street low $59, according to LSEG data, citing likely negative earnings revisions and challenges for overall growth

** Last month, BBY posted Q4 profit beat and acknowledged soaring prices for memory chips — stemming from a supply shortage caused by the tech industry racing to build out AI capacity — have added to costs

** Of 26 brokerages covering BBY, recommendation breakdown is 6 "strong buy" or "buy", 18 "hold" and 2 "sell"; median PT $72

** Through Fri close, stock down 6.8% YTD compared to 4.6% decline for S&P 500 Consumer Discretionary sector .SPLRCD

** Stock recently traded at 9.5x forward earnings, below five-year avg forward PE of roughly 12x, suggesting it may be undervalued

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))