Busy Earnings Day For Best Buy (BBY)

Electronics retailer Best Buy (BBY) rose 3.6% today after reporting strong earnings. Fourth quarter earnings jumped 37% to $770 million. EPS came in at $1.86. Best Buy forecast full year earnings between $3.45 to $3.60. CEO Brian Dunn appeared on CNBC's Fast Money this evening. Dunn said "Trends tell me staying connected has become non-negotiable for millions of people and that some of the things we offer no longer fall under the category of discretionary purchases.” Dunn is not alone in his bullish view of Best Buy's shares. Goldman Sachs upgraded Best Buy to a Buy rating last week and placed a $47 price target on its shares. Janney Montgomery Scott raised its price target to $48. While the earnings story looks great at Best Buy (BBY), shares look like they are close to becoming fully valued. Based on 2010 earnings expectations, Best Buy's shares are trading at 13 times earnings. Gross margin declined 100 basis points and the stock has had a huge run up over the past 15 months. Shares closed the day at $42.66 after topping out at $44.79.