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The best buy could emerge from the pandemic in a potentially more profitable position, Bank of America Merrill Lynch says.
Patrick T. Fallon / AFP via Getty Images
After 2020 erupted in a global pandemic that closed stores, investors may have been forgiven for thinking that the wildest movements in retail stocks were behind them . Then came 2021, with a brief push – largely focused on consumer names – that brought another unexpected blow to the market.
Mar Barron’s noted, foundations have not meant much during this frenzy, but Bank of America Merrill Lynch argues that they will again. That does
Buy best
stock (ticker: BBY) looks particularly attractive right now.
Analyst Curtis Nagle raised his rating on Best Buy shares on Thursday to Buy from Neutral, while maintaining a $ 132 price target. He has long viewed the company as “One of the highest quality names in our cover,” but it has recently received more attention for the sections. He writes that the company can emerge stronger in a post-pandemic world.
Nagle writes that Best Buy will be joining the big winners of Covid-19, e.g.
Home Center
(HD),
Targets
(TGT), and
Walmart
(WMT), leaving the crisis “in a stronger and perhaps more profitable position as the company has learned to be more cost – effective over the past year. “While locksmiths may have stimulated demand for many consumer electronics, the company is right to argue that technology will be at the forefront of many people’s lives going forward, there are he writes. He is also optimistic about the company’s strong cash position and very low discount.
While investors have been concerned about how well pandemic winners can retain the new customers they acquired in 2020, Nagle argues that there is too much skepticism about Best Buy stock. . After all, it trades at 14 times its 2021 earnings-per-share estimates, easily lower than stay-at-home beneficiaries and hardline retailers in general.
Furthermore, he recognizes that Best Buy has a strong track record of delivering beat-and-pick seasons, and sees “no reason why this should not continue.”
Best Buy stock rose 2.9% to $ 113.50 in recent trading. The shares have gained 13.7% year to date and are up 28% in the last 12 months.
Write to Teresa Rivas at [email protected]