Shares of Best Buy (NYSE:BBY), an electronics superstore still holding on despite Amazon.com's (NASDAQ:AMZN) competition, soared abruptly this morning following a strong recommendation from an analyst at Telsey Advisory Group. The company got upgraded to an outperform rating in the research note, with a price target of $90.
Telsey analyst Joseph Feldman says he expects comparable sales growth of 7.7% for fiscal 2021. He additionally predicts this growth will result in earnings per share (EPS) of around $6. The company's sales are still at approximately 70% of the previous fiscal year's levels, pointing to its strength despite the huge downward sales pressure of the coronavirus pandemic across the U.S. economy.
Feldman says the switch to remote work, which may linger even after COVID-19 subsides, will help drive Best Buy's electronics sales. People spending more time at home will also bolster the company's performance, according to the research note. The analyst observes Best Buy's "solid execution in stores and online, relevant and innovative products, and customer-centric offerings" will help it continue to profit from the noted consumer trends.
Feldman also remarked, "we expect Best Buy to come out of this pandemic as a winner in retail, helped by its consistent market share gains, stable profitability, leading omni-channel capabilities, solid cash flow generation, healthy balance sheet, and strong management team."
Best Buy already showed a remarkable recovery in April, climbing 34.6% after a steep March plunge. Its shares are currently trading at slightly over $86, just a few dollars short of Feldman's predicted $90 and far above Telsey's previous $72 price target.