UBS upgrades Best Buy to Buy, raises price target to $106

UBS has upgraded Best Buy (BBY) to Buy from Neutral and raised its price target from $85 to $106, citing the company's restructuring efforts and new product cycle.

Yahoo Finance's Seana Smith and Madison Mills break down the bullish call and some of the retailer's tailwinds.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

Well, that's by getting a boost from a bullish call from U BS.

The firm upgrading the stock to buy from neutral and raising their part price target to $106 from 85.

They said of the company's restructuring efforts and new product cycle.

And interestingly that citing the timing here, Shana upcoming appliance upgrades as a potential boon, which is interesting to me given what we've been saying about the struggles of housing market, but it is still cyclical, right?

At some point, your appliances will just start to break and that is a boon for a company like a best buy.

The analyst Michael Lasser also saying that this would be about a 22% upside.

It should be evident that the company's market share tends to flourish at the earlier stages of a product cycle.

But their restructuring efforts could be a boon for the company's earnings moving forward, Shana.

Yeah, and this is a stock that over the last year, at least up just around 12%.

So lots of questions about what exactly consumer demand looks like, how so many of these names similar to best buy are positioned, right now.

But U Bs at least coming out saying that they really see this potential forthcoming appliance upgrade cycle and they think that is going to be enough here to lift a best buy here from current levels.

You can see it at least for today or at least where it closed on Friday closed just above 87 bucks a share.

We are seeing a bit of a move to the upside here in early trading on the heels of this call here from U BS.

But again, this, this is all surrounding this new product cycle.

What exactly they think that that is going to do here for Best Buy and a lot of this just hinges on the consumer.

We will get another reading on the consumer tomorrow when we get retail sales.

But again, this willingness to spend especially on these larger ticket items.

I think a lot of that is still in question given where we are in the economic cycle.