So far shares of Best Buy (NYSE:BBY) have managed to escape the retail woes seen at many specialty retailers.  It does after all have a huge selection of PC’s, smartphones, iPods, video games, LCD TV’s, and much more.  But it also has a substantial part of its floor space tied to other durable goods like appliances, fixtures, and some furniture that have not been doing well economy-wide during a housing best.

Analysts according to First Call are at $0.41 EPS on Revenues of $9.43 Billion.  For the coming quarter analysts are expecting $1.82 EPS on $13.67 Billion in revenues.

Wal-Mart (NYSE:WMT) is becoming a formidable competitor, although we still believe that hard core retail electronics buyers are going to head to a Best Buy instead of Wal-Mart if it is a targeted outing for electronics alone.  Circuity City (NYSE:CC) has managed to do so poorly in comparison to Best Buy that one could argue that Best Buy has won over more tech-savvy loyalists since Circuit City let go of higher-waged knowledgeable salespeople.

But the last thing that could be an impact is the discounting, particularly from larger chains that are paring down their stores and inventory on close-out sales.  The good news is that CompUSA, who many believe are selling electronics below-cost (true or not is another story), doesn’t have enough stores to drastically put a dent in a Best Buy.

Analysts have an average share price target of almost $57 on Best Buy stock.  It is hard to call options a day out, but options traders appear to be expecting a price move of up to $1.75 or $2.00.  That number is more subjective because it is a day ahead and because expiration is this coming Friday.  Best Buy’s stock chart was on a tear upwards until the last few days and now you could make the same argument that it is a failed break-out stock, or that it has about $2.50 in either direction before running into hard support or resistance.

Jon C. Ogg
December 17, 2007

Jon Ogg can be reached at [email protected]; he produces the SPECIAL SITUATION newsletter and he does not own securities in the companies he covers.

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