BBY Best Buy Inc. earnings report due to this week, the 29th of August. Before we get into the details few words about the company we are about to analyze.
According to Wikipedia, Best Buy Co. (NYSE: BBY), Inc. is an American multinational consumer electronics corporation headquartered in Richfield, Minnesota, a Minneapolis suburb. Internationally, it also operates in Canada and Mexico. It was formerly operational in China until February 2011 (when the faction was merged with Five Star) and in Europe until 2012. According to Yahoo! Finance, Best Buy is the largest specialty retailer in the U.S. consumer electronics retail industry.
Regarding earning, Best Buy Co., Inc. is expected to report earnings the 29th of August 2017 before market open. The report will be for the fiscal Quarter ending Jul 2017. According to Zacks Investment Research, based on 12 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.63. The reported EPS for the same quarter last year was $0.57.
Overall view, Best Buy (NYSE: BBY) shares are surging this year, a company many investors though was in big trouble because of the threat from Amazon. The stock is up by 55% this year and up by approximately 240% since the company named Hubert Joly as its CEO five years ago.
Main reasons why BBY Best Buy has been surging:
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The Nintendo Switch console launch
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Best Buy proved Amazon-proof in contrast with Circuit City and RadioShack
Despite the very encouraging data, it is worth to mention that the BBY stock is well behind AMZN’s performance. Since August 2012, AMZN stock is up by 300% yet if we account the S&P 500 is up by 75% during the same time frame and while the S&P Retail ETF (XRT) has risen only 25%, BBY Best Buy still has an astonishing performance.
Coming back to the Earnings subject, Jefferies raised Best Buy Sales and Earnings estimates on Tuesday for the second quarter, citing strength in the video game, appliance and smartphone categories.
“Based on our field checks and other research, we believe Best Buy should be able to grow domestic SSS [same-store sales] at the high end or better than mgmt.’s plan,” analyst Daniel Binder wrote in a note to clients. “We expect Best Buy to benefit from strength in appliances and connected home, however we also expect robust growth in entertainment from the introduction of two gaming consoles in Q1 and mobile to benefit from a full quarter of Samsung S8/S8+ availability.”
“We believe that Best Buy’s entertainment category saw a second consecutive quarter of robust growth driven by the launch of the Nintendo Switch and the 1TB PlayStation Slim Gold console as the company laps fairly significant comparable store sales declines in this category,” he wrote.
As a result, the analyst raised his July quarter Best Buy U.S. same-store sales growth estimate to 2.5 percent from 2.0 percent. He also increased his earnings-per-share forecast for the same quarter to 66 cents from 59 cents versus the Wall Street consensus of 63 cents.
Our View in ElliottWave-Forecast.com
When it comes to our BBY’s stock price analysis, Best Buy is still a buy in the dip on the weekly time frame while still missing the minimum target of the 70’s level. The 70’s price target is the equal legs of the (w) – (x) swing since the stock first started trading. The rally since 12/2012 as well seems incomplete. Price took the equal legs at the 56’s zone but RSI yet to show divergence, a fact suggesting we are most likely going to see the next level at the 1.236% extension around the 66’s, just 4$ from the equal legs at 70’s mentioned above.
BBY Best Buy Weekly Elliott Wave Count
BBY Best Buy Weekly Elliott Wave Count
At this stage we would like to see price correcting down to the 56’s zone where the supporting trend line since 06/01/16 is holding. From there we expect price to bounce and ideally extend to new highs towards our target or at least create a 3 wave bounce which should provide longs the ability to get Risk Free.