best buy store in sacramentoIs Best Buy Worth Buying Now?

The huge consumer electronics retailer Best Buy (NYSE:BBY) has been a favorite whipping boy of many analysts for several years. They just didn’t see much promise in the big-box retailer. They see that the space that Best Buy is competing in has really low margins and there’s just too much competitive pressure. That’s why it’s no surprise that a lot of analysts have pretty much recommended against buying Best Buy or simply holding Best Buy if you happen to already own the stock.

Well, all that changed in the recent quarters when Best Buy started producing solid results. In fact, the last analyst that has been quite bearish on Best Buy has dramatically changed his mind. Michael Pachter of Wedbush Securities is no longer rating the stock as underperformed. Instead, he has upgraded it to neutral. While this isn’t exactly a huge vote of confidence, it does speak volumes regarding the tremendous change of fortunes Best Buy has enjoyed recently. Pachter also upgraded his 12-month price target for this stock by over 50%. Originally, he was saying that the stock will only be worth $24; now he’s saying that within 12 months, it should hit $37. This is all well and good, but this really is too little too late for this analyst, because he seems to be late to the party. According to consensus estimates on this company, the average price target is $43.10. In addition, Best Buy has been getting a lot of “buy” ratings.

Usually, when I see this situation, it brings back the old saying among investors: “buy on bad news, sell on good news.” If you already own Best Buy stock, this might be a good time to sell. The company reported profit and same-store sales that were better than expected. It even raised its quarterly dividend. That said, it maay not be enough to weather potential blowback and weakness in the general consumer space in 2015.