Shares of Best Buy (NYSE:BBY) have jumped today, up by 10% as of 1 p.m. EDT, after the company received an upgrade from Wall Street. Telsey Advisory Group boosted its rating from market perform to outperform.
Telsey analyst Joseph Feldman believes that Best Buy has handled the COVID-19 pandemic relatively well, especially when compared to other retailers. At the same time, the wholesale shift to remote work at many companies is driving demand for consumer electronics necessary to work from home, such as laptops and webcams for videoconferencing.
Despite widespread store closures, Best Buy has been able to retain around 70% of its sales, according to Feldman. The company currently offers curbside pickup for online orders, in addition to home delivery. The analyst goes as far as to suggest that Best Buy will emerge from the crisis as "a winner in retail," thanks to market share gains, strong cash flow, and effective leadership.
Telsey boosted its price target on best Buy shares from $72 to $90, which is derived from a forward earnings multiple of 15. Feldman is modeling for earnings per share of $6 next year. Separately, UBS increased its price target from $74 to $80 while maintaining a neutral rating on the stock.
Looking ahead, the analyst is also encouraged about new gaming consoles that are scheduled to launch later this year, which should also boost Best Buy's gaming business. Best Buy reports first-quarter results on Thursday.