Best Buy: The Worst May Already Be Priced In

 | Jun 10, 2022 03:00

  • Best Buy is a consumer electronics retailer, trading, like many other peers, near its 52-week low. Despite or perhaps because of that, InvestingPro views it as one of the most undervalued stocks.

  • This article shows how we found Best Buy Co (NYSE:BBY), what its set-up is, what headwinds it is facing, and what upside potential it has.

  • If you’re interested in upgrading your search for new investing ideas, check out InvestingPro.

    • h2 Another Retail Opportunity/h2

    As the market continues to search for a direction heading into the summer, a number of sectors are continuing to suffer. Retail is one of them, as investors try to understand whether demand shifts are temporary or permanent, and as inventory challenges continue to pop up for firms.

    Last time, we wrote about The Children's Place (NASDAQ:PLCE), a clothing retailer with strong fundamentals even as it is exposed to cost inflation and a difficult environment. This time, using InvestingPro tools, we will analyze another retailer that may be set up to deliver strong returns despite what looks like a difficult short-term situation.

    This article will analyze Best Buy (NYSE: InvestingPro model suggested significant upside potential, great financial health, and recent quarterly earnings discussed in detail in this article, we believe the company is poised to outperform the market even amid ongoing inflationary pressures that negatively affect the industry.

    Note: All pricing data is as of June 8th closing price.

    InvestingPro shows the list of most undervalued/overvalued stocks, out of which Best Buy caught our attention. Given the remaining challenges in the Retail sector, and the recent huge stock selloff following some big players’ disappointing quarterly results, Best Buy seemed an interesting candidate with its 64.5% upside potential. Moreover, the company’s stock price is still down 24% year to date, even after its recovery from the mid-May 52-week low.