BBY - Embedded Expectations Analysis - 2019 02 05
ï€Best Buy Co. (BBY:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 13.7x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management has concerns about their ability to improve customer satisfaction and meet consumer needs, tariff headwinds, and the potential of recent acquisitions and investmentsï€Specifically, management may be concerned about their ability to improve in-store customer experiences, and about current customer satisfaction when compared to peers. Additionally, management may lack confidence in their ability to maintain a competitive advantage selling large items, and evolve from a product provider to a need-based solution. Moreover, they may be overstating their focus on share buybacks, ability to counteract tariff headwinds and the functionality of their voice assistant. Finally, management may be concerned about the potential of investments in distribution centers, Mobile 2020 and GreatCall, as well as the value of in-store
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Best Buy provides computing and mobile phones, consumer electronics, appliances, entertainment, services and other products. The company operates two reportable segments: Domestic, which is comprised of the operations in all states, districts and territories of the U.S. under various brand names including Best Buy, bestbuy.com, Best Buy Direct, Best Buy Express, Best Buy Mobile, Geek Squad, GreatCall, Magnolia and Pacific Kitchen and Home; and International, which is comprised of all operations in Canada and Mexico under the brand names Best Buy, Best Buy Express, Best Buy Mobile, Geek Squad and the domain names bestbuy.ca and bestbuy.com.mx.
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