BBY · Best Buy
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $114.62
Note written ·
Price against the kill line
9.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $114.62, on record since 11 November 2026. The shares are up 23.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $114.62, 9% above the 11 November 2026 close, would show the shares leading the S&P 500. So would Q3 fiscal 2027 comparable sales above the 3.0% top of Best Buy's forecast, paired with a higher fiscal 2027 outlook.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 1 August 2026, filed 4 September 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 9,779
- Revenue, change on a year (%)
- +3.6
- Gross margin (%)
- 23.9
- Operating margin (%)
- 4.3
- Free cash flow, four quarters ($M)
- 1,768
- Net cash, cash less debt ($M)
- 1,086
- Price to earnings (×)
- 17.2
- Enterprise value to sales (×)
- 0.5
All filed numbers
What Best Buy reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 9,779 | +3.6 | 23.9 | 4.3 |
| first filed | 8,936 | +1.9 | 23.5 | 4.1 |
| first filed | 13,814 | −1.0 | 20.9 | 5.2 |
| first filed | 9,672 | +2.4 | 23.2 | 2.0 |
| first filed | 9,438 | +1.6 | 23.2 | 2.7 |
| first filed | 8,767 | −0.9 | 23.4 | 2.5 |
| Pre-tax income ($M) | 430 |
| Net income ($M) four quarters: 1,272 | 315 |
| Diluted shares, change on a year (%) against the quarter to 2 August 2025 | +0.3 |
| Operating cash flow ($M) | 2,475 |
| Capital spending ($M) | 707 |
| Free cash flow ($M) | 1,768 |
| Cash and short-term investments ($M) | 2,255 |
| Debt ($M) | 1,169 |
| Net cash, cash less debt ($M) | 1,086 |
| Deferred revenue ($M) −10.3% on a year | 191 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 922 |
| Inventory ($M) | 6,296 |
| Shareholders' equity ($M) | 3,183 |
| Market value ($M) | 21,826 |
| Enterprise value, market value plus net debt ($M) | 20,740 |
| Enterprise value to sales (×) | 0.5 |
| Enterprise value to operating income (×) | 12.1 |
| Price to earnings (×) | 17.2 |
| Price to book value (×) | 6.9 |
| Free-cash-flow yield (%) | 8.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.9% of shares outstanding sold short, 5.5 days of average trading to cover, +11.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $38.4M |
| 12 monthsfrom | $0 | $194.7M |
The thesis
Best Buy shares are more likely to lag the S&P 500 over the next three months. A 24.5% rise in three months has carried them above the newest analyst targets, while the company's own forecast calls for slower sales growth in fiscal Q3. The Q3 fiscal 2027 report on 24 November 2026 settles it. Best Buy's investor relations site lists the call for 8:00 a.m. Eastern that day.
The shares closed at $105.16 on 11 November 2026. That is 1.6% below the 52-week intraday high of $106.83, set on 9 November 2026. The price is above Citigroup's $102 target and the $95 targets from Wells Fargo and Evercore ISI. All three firms rate the shares neutral. The market has already priced in more of the hardware-refresh recovery than the analysts who cover it.
The rating is Low for three reasons. The recovery has been public since the 27 August 2026 guidance raise. Best Buy's Q3 forecast points to slower comparable-sales growth than Q2 delivered. And the report will be the first under chief executive Jason Bonfig, who took over on 1 November 2026. A quarter that beats the top of the forecast and lifts the full-year outlook again would break the call.
Bullish and bearish views on Best Buy Company, Inc.
The bull case on Best Buy Company, Inc. (BBY), in brief: Q2 beat reached the income statement. The bear case: Q3 forecast implies slower growth.
Bull case
- Q2 beat reached the income statement. On 27 August 2026 Best Buy reported Q2 fiscal 2027 comparable sales (sales at stores and sites open at least a year) up 4.1%. Revenue was $9.779 billion, against $9.438 billion a year earlier, and adjusted earnings per share (EPS) rose 15% to $1.47.
- Full-year guidance moved up on every line. The same release raised fiscal 2027 revenue guidance to $42.3–$42.8 billion from $41.2–$42.1 billion. Comparable-sales guidance rose to 1.9%–3.0% from a range of −1.0% to +1.0%. Adjusted EPS guidance rose to $6.70–$6.90 from $6.30–$6.60.
- Analysts are lifting targets. Citigroup raised its target to $102 from $88 on 6 November 2026, and Wells Fargo raised its to $95 from $85 the same day. Evercore ISI moved to $95 from $90 on 20 October 2026.
- New supply and revenue channels before the holidays. TCL said on 9 November 2026 that it had expanded its product availability to BestBuy.com. Zip Co extended its Best Buy partnership to US stores nationwide on 26 October 2026. Best Buy Gamers launched in beta on 20 October 2026. Best Buy has not disclosed revenue from any of these.
Bear case
- Q3 forecast implies slower growth. On 27 August 2026 Best Buy guided Q3 comparable sales to 1.0%–3.0%, below Q2's 4.1%. It guided the Q3 adjusted operating income rate to 4.1%–4.2%, under the 4.4%–4.5% full-year guide. Any result inside the range would show Q2 was the peak quarter of the year.
- Price above every recent target. The $105.16 close on 11 November 2026 is above Citigroup's $102 target and 10.7% above the $95 targets from Wells Fargo and Evercore ISI. None of the three rates the shares a buy.
- Insiders sold into the rally. SEC Form 4 filings show founder Richard Schulze sold 300,000 shares at an average of $92.51 on 16 September 2026 and gifted another 600,000. Chief human resources officer Kathleen Scarlett sold 116,062 shares at an average of $92.15 on 23 September 2026, after exercising options at $70.50.
- Two top-level management changes in three months. Anne Bramman became chief financial officer on 19 August 2026 and Jason Bonfig became chief executive on 1 November 2026. A first report under a new chief executive often comes with a reset of strategy or outlook.
Price setup
The shares closed at $105.16 on 11 November 2026, up from $85.35 on 13 August 2026. The 3-month gain is 24.5%. On 9 November 2026 the shares closed at $106.28 and set the 52-week intraday high of $106.83. They then gave back part of that move, closing at $104.10 on 10 November 2026. The jump to the 9 November 2026 close came from $99.63 on 6 November 2026, the day Citigroup and Wells Fargo raised their targets.
In adjusted daily closes, the price is 13.3% above the 50-day moving average of $92.8 and 39.5% above the 200-day average of $75.4. It is almost double the 52-week closing low of $55.52 from 13 May 2026. Fiscal Q3 ended about 31 October 2026, so the quarter's results are already final. What the 24 November 2026 report adds is the reported comparable-sales figure, the margin and the first holiday-quarter outlook under the new chief executive.
Catalysts ahead
- 24 November 2026: Q3 fiscal 2027 results and earnings call at 8:00 a.m. Eastern. Comparable sales against the 1.0%–3.0% forecast, the operating margin against 4.1%–4.2%, and any change to the full-year outlook decide whether the recovery keeps pace with a share price above the analyst targets.
- 27 November 2026: Black Friday, start of the peak holiday sales weekend. Early holiday demand for electronics tests the fiscal Q4 outlook that Best Buy is expected to give on 24 November 2026.
What would change the view
A daily close above $114.62, 9% above the 11 November 2026 close, would show the shares leading the S&P 500. So would Q3 fiscal 2027 comparable sales above the 3.0% top of Best Buy's forecast, paired with a higher fiscal 2027 outlook.
What it trades with
Best Buy trades with US consumer discretionary spending, especially on big-ticket electronics such as computers, phones, televisions and gaming hardware. Its results depend on the hardware replacement cycle, supplier and tariff pricing, and freight costs. Holiday commentary from Walmart, Target and Costco can move the shares before Best Buy reports. Amazon is both a competitor and a partner: Best Buy and Amazon said on 23 September 2026 that Best Buy Ads would reach Insignia television inventory through Fire TV.
The evidence, claim by claim (8)
- Best Buy reported Q2 fiscal 2027 comparable-sales growth of 4.1%, revenue of $9.779 billion and adjusted EPS of $1.47, up 15% from $1.28. Best Buy Q2 fiscal 2027 earnings release · as of
- Best Buy raised fiscal 2027 guidance to revenue of $42.3–$42.8 billion, comparable sales of 1.9%–3.0%, an adjusted operating income rate of 4.4%–4.5% and adjusted EPS of $6.70–$6.90. Best Buy Q2 fiscal 2027 earnings release · as of
- Best Buy forecast Q3 fiscal 2027 comparable sales of 1.0%–3.0% and an adjusted operating income rate of 4.1%–4.2%. Best Buy Q2 fiscal 2027 earnings release · as of
- Citigroup raised its Best Buy price target to $102 from $88 and kept a Neutral rating; Wells Fargo raised its target to $95 from $85 and kept Equal-Weight. Citigroup and Wells Fargo notes reported in company news · as of
- Evercore ISI kept an In Line rating on Best Buy and raised its price target to $95 from $90. Evercore ISI note reported in company news · as of
- Richard Schulze sold 300,000 Best Buy shares at an average of $92.51 and gifted 600,000 shares on 16 September 2026. SEC Form 4 filed 18 September 2026 · as of
- Executive Kathleen Scarlett exercised options on 96,166 shares at $70.50 and sold 116,062 shares at an average of $92.15. SEC Form 4 filed 24 September 2026 · as of
- TCL expanded the availability of its products to BestBuy.com. TCL announcement reported in company news · as of
Sources
- Q3 FY27 Best Buy Co., Inc. Earnings Call · investors.bestbuy.com
- Best Buy Reports Q2 FY27 Results · corporate.bestbuy.com ·
- MarketBeat ·
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