Best Buy's Market Share Gains Likely To Continue

Best Buy Co Inc BBY has made a number of brick-and-mortar, online and supply chain investments over the last few years, which will likely “continue to drive market share gains for the foreseeable future,” Loop Capital Markets’ Anthony Chukumba said in a report. He initiated coverage of the company with a Buy rating and a price target of $58.

Best Buy has a market leadership position, favorable prospects in the near term, a track record of reporting its results significantly ahead of expectations and substantial free cash flow generation. Given these factors, the analyst believes “the stock should trade at a significantly higher valuation,” especially in light of the current valuations of “other market leading, relatively slow growth retailers,” Chukumba commented.

Market Share Gains To Continue

Since Hubert Joly took over as Best Buy’s CEO in 2012, the company has taken “significant steps to improve nearly every aspect of its operations,” Chukumba noted. These steps include widespread price reductions, opening several vendor-funded shop-in-shops and the e-commerce websites being overhauled.

The investments made by Best Buy over the last few years would continue to drive market share gains for the foreseeable future, the analyst stated.

At last check, Best Buy shares were up 2.09 percent at $47.92.

Image Credit: By Nicholas Eckhart from Elyria, Ohio, United States of America (Best Buy in Pittsburgh, Pennsylvania) [CC BY 2.0], via Wikimedia Commons