Best Buy Consensus Below Guidance, Deutsche Bank Reports

Best Buy Co.'s BBY business and financial model continues to evolve to one focused on gross profit dollars rather than top line growth, Deutsche Bank reports. The driver is BBY's under penetration in fast growing wireless categories, enabling above average growth in these high margin businesses “and we think we are in the early innings of these benefits.” “Current consensus forecasts for this year are $3.56, at the low end of BBY's guidance of $3.55-$3.70,” Deutsche Bank writes. “But, the guidance excludes buybacks beyond the 1H activity of about $700mm. Yet, we believe that BBY continues to buy back stock this quarter, meaning that in effect, consensus is below guidance.” Best Buy closed Friday at $42.98.