Barclays says that the near-term prospects for Best Buy are dim as consumer electronics demand slows. Karen Short, an analyst at Barclays, downgraded shares in electronics retailer Best Buy to equal weight. The company also missed the earnings estimates during its fiscal first quarter. She also lowered the guidance for the year. We are concerned that 2H guidance is optimistic and FY25 guidance, from an operating margin perspective (6.3%-6.8 %),”) Short stated. She said that BBY had many options to cut its costs, including advertising and labor, but the company still set a very high standard. Best Buy, like many other retailers in this earnings season is struggling with rising inflation and softening demand. Short thinks that Best Buy’s lowest-end customers will be most affected by the difficult inflationary environment, rising rates and surging energy costs. She wrote that “These headwinds would likely be difficult to mitigate for BBY given the discretionary nature its products and its lack of pricing power.” Barclays has also reduced its price target of Best Buy from $135 a share to $80 per share. That implies an 8.9% return on Tuesday’s close. Electronics retailer shares have plunged by 27% and 18.3%, respectively. Barclays also decreased earnings estimates per share. — CNBC’s Michael Bloom contributed reporting
