Best Buy’s Value May Be Too Compelling… To Some (BBY)

Chasing a stock just because it appears to be a “value stock” is often a painful exercise that damages investors.  Still, sometimes the value of a company is just too difficult to ignore.  That may finally have been the case for Best Buy Co. Inc. (NYSE: BBY).  That is what some Wall Street analysts have conveyed.

J.P. Morgan came out recently and boosted its third quarter targets by about 16% on earnings due to a slight gain in domestic same-store sales.  This is ahead of next week’s earnings report, making the call stand out more than a research upgrade or downgrade on an after the fact basis.  The firm also believes that the iPhone 4S likely helped turn the wireless back to the positive side again. 

Janney Capital may have maintained its third quarter earnings targets but the firm did raise its fiscal year expectations because of the mobile restructuring plans by the electronics retailer.

What is interesting is that even with lower growth and even with the concerns about Best Buy, the stock trades at just under 8-times this year’s expected earnings and it trades at barely 7-times expected 2013 earnings.

Best Buy shares closed lower on Thursday when these calls were made but shares are at least indicated up marginally so far this Friday morning by 0.5% at $27.57.