Summary
• Best Buy (NYSE:BBY) fell by 8% on Thursday, after the company posted mixed earnings compared to Wall Street expectations.
• Based on its market cycles, we believe the stock may face small downside risk before moving modestly higher.
The company reported earnings per share of $1.08 and total revenue of $9.54 billion, compared to analyst estimates of $0.99 and $9.55 billion. Same store sales came in low at 1.6% growth compared to the expectation of 2.1%.
Also, CFO Matt Bilunas explained that management was lowering its guidance due in part to "tariffs on goods from China" as well as a shift in consumer buying behavior.
Our approach to stock analysis uses market cycles to project price action. Our analysis is that the stock is in the declining phase of its current cycle. We don’t see too much more downside before a forthcoming rally, which is likely to be modest, Our intermediate term target is $68.
For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.