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Loop Capital says invest in Best Buy to capitalise on housing market rebound

By: Invezz
invest in best buy stock loop capital recommends

Best Buy Co Inc (NYSE: BBY) is in the green at writing after a senior Loop Capital analyst issued a bullish note in its favour.

Best Buy stock has upside to $93

Anthony Chukumba reiterated his “buy” rating on the electronics retailer this morning and raised his price to $93 which suggests about a 20% upside from here.

The analyst dubbed Best Buy stock a “stealth housing play” in his research note today because he expects sales of appliances and television sets to pop as renovations and upgrades rebound.

The news arrives only weeks after $BBY reported its financial results for the fourth quarter that topped Street estimates (find out more).

Shares of the $17 billion company based out of Richfield, Minnesota are already up close to 25% versus their low in early November.

Watch here:$BBY is inexpensive at current multiple

Anthony Chukumba expects Best Buy stock to benefit once mortgage rates start to fall as well. His research note reads:

[Housing market] is encouraging given Fed rate cut campaign is yet to commence. $BBY offers an attractive derivative play on improved home sales given its inexpensive relation valuation.

The New York listed firm is currently trading at about 13 times its estimated earnings for 2024 versus its peer between 19 times to over 62 times.

US Retail Sales increased 0.8% over the last year but after adjusting for higher prices fell 2.3%. These numbers are well below the historical averages of +4.7% nominal and +2.1% real.

— Charlie Bilello (@charliebilello) March 14, 2024

Best Buy reported $169 million of restructuring charges in Q4 related to layoffs aimed at right-sizing resources. It did not, however, reveal the exact number of employees that were let go. Best Buy shares currently pay a dividend yield of 4.84%.

The post Loop Capital says invest in Best Buy to capitalise on housing market rebound appeared first on Invezz

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