Telsey Advisory Group raised its price target on Best Buy (NYSE:BBY) to $90 from $80, maintaining an Outperform rating. The stock surged 21% over the past week and trades at a P/E ratio of 11.95.
The retailer reported first-quarter fiscal 2026 adjusted diluted EPS of $1.28, beating Telsey's estimate of $1.23. Total comparable sales rose 2.0%, with domestic sales up 1.8% and international sales up 4.7%, exceeding Telsey's projection of 1.0% and company guidance of approximately 1.0%.
Sales strength continued in computing, mobile phones, gaming, and emerging categories including AI glasses, 3D printers, collectibles, toys, health rings, and gaming handhelds. Home theater sales improved, while appliances remained weak with a U.S. comparable sales decline of 13.6%.
Domestic online comparable sales rose 1.4%, representing 32% of domestic revenue, flat with the prior year. Sales strengthened through the quarter, with comparable sales rising 3.0% in March and 4% in April following a 1% decline in February.
Operating margin increased approximately 27 basis points to 4.1%, above Telsey's estimate and company guidance of 3.9%, driven by improved SG&A leverage against higher-than-expected comparable sales.
Analyst views are mixed: UBS downgraded to Neutral, Goldman Sachs maintained Sell, and Jefferies kept Buy.
