Best Buy Falls as Wedbush Sees Better Options By Investing.com

By Christiana Sciaudone

Investing.com — Best Buy Co Inc (NYSE:BBY) dropped 2% after Wedbush said there are “better opportunities elsewhere.”

The firm cut shares to neutral from buy as it said to buy Lowe’s (NYSE:LOW) or Williams-Sonoma (NYSE:WSM) over the electronics retailer.

“We believe that the category will continue to trail home improvement and home furnishings category growth in 2021,” analyst Seth Basham wrote in a note, according to StreetInsider. “We see better opportunities in other hardlines names, particularly in the home improvement category (LOW, FND) and home goods/ mattress category (WSM, RH (NYSE:RH), W, OSTK, TPX, CSPR, PRPL).”

Best Buy reported its strongest earnings on tape for the quarter ended in January, taking in more than $16 billion. Online sales grew almost 90% to a record $6.7 billion for the period amid a pandemic that kept us homebound.

But the company forecast that comparable sales might fall for the 2022 fiscal year after vaccinations rise and government stimulus gets spent.

The analyst pointed to 29% growth in consumer electronics sales for March, a strong showing, but less so when compared to home furnishings, up 50%, and home improvement, up 32%. 

Discretionary spending is also likely to shift to travel and entertainment as the U.S. reopens, Basham said.