Long Trade Idea
Enter your long position between $68.72 (the lower band of its horizontal support zone) and $72.75 (the upper band of its horizontal support zone).
Market Index Analysis
- Best Buy (BBY) is a member of the S&P 500.
- This index trades inside a bearish chart formation with rising breakdown catalysts.
- The Bull Bear Power Indicator of the S&P 500 is bullish with a descending trendline.
Market Sentiment Analysis
Equity futures waver in and out of positive territory as markets await the Fed decision, where a hawkish cut is the base case, referring to a 25-basis-point interest rate cut with a hawkish statement that future cuts will have a higher threshold. The dot-plot chart will receive heightened attention. JP Morgan experienced its most significant one-day decline in six months after warning on higher 2026 spending amid rising credit card competition and AI-related costs. Oracle will provide the next AI test, as high debt and valuation concerns linger, while silver rallied to a fresh all-time high above $60, driven by tight supply and economic woes.
Best Buy Fundamental Analysis
Best Buy is a consumer electronics retailer in an ongoing transition to a multichannel online-first retailer. It also produces in-house products under eight brands.
So, why am I still bullish on BBY despite its post-earnings slide?
Best Buy reported $9.67 billion in revenue and earnings per share of $1.40, beating expectations of $9.59 billion and $1.31, respectively. It also increased its full-year outlook for both. I remain bullish on its online strategy, strategic partnerships, and customer experience via its in-store zones for gaming, appliances, and VR. Stable margins and accelerating momentum in high-end electronics add to my bullish scenario.
Metric | Value | Verdict |
P/E Ratio | 24.15 | Bullish |
P/B Ratio | 5.78 | Bearish |
PEG Ratio | 1.00 | Bullish |
Current Ratio | 1.05 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 24.15 makes BBY an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 29.21.
The average analyst price target for BBY is $84.14. It suggests good upside potential with manageable downside risks.
Best Buy Technical Analysis
Today’s BBY Signal
- The BBY D1 chart shows price action inside a horizontal support zone.
- It also shows price action below its ascending Fibonacci Retracement Fan.
- The Bull Bear Power Indicator is bearish with a positive divergence.
- Bullish trading volumes began to rise after price action reached support.
- BBY corrected as the S&P 500 approaches all-time highs, a bearish confirmation, but underlying bullish momentum has risen.
My Call on Best Buy
I am taking a long position in BBY between $68.72 and $72.75. I am bullish on its momentum in high-end electronics and in-store experiences, as well as its low 5-year PEG ratio.
- BBY Entry Level: Between $68.72 and $72.75
- BBY Take Profit: Between $84.14 and $87.54
- BBY Stop Loss: Between $61.86 and $63.39
- Risk/Reward Ratio: 2.25
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