What Happened?
Shares of electronics retailer Best Buy (NYSE: BBY) jumped 8.8% in the afternoon session after investors reacted positively to a softer U.S. tone on trade with China, which eased worries about potential tariffs that could impact the retailer.
The broader market rallied after reports signaled that both the U.S. and China were willing to continue trade talks, reversing losses from the previous trading session when tariff threats caused a downturn. This news was particularly important for retailers like Best Buy, which source many consumer goods from China and could face higher costs from tariffs.
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What Is The Market Telling Us
Best Buy’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 14.8% on the news that the company reported a mixed fourth quarter, but the negatives outweighed the positives as EBITDA missed expectations, and full-year EPS guidance came in below what Wall Street was hoping for. On the other hand, sales and earnings exceeded expectations for the quarter. However, guidance assumed minimal change in consumer behavior due to inflation, which wasn't reassuring. Overall, this was a weak quarter.
Best Buy is down 10.8% since the beginning of the year, and at $76.84 per share, it is trading 22.1% below its 52-week high of $98.68 from October 2024. Investors who bought $1,000 worth of Best Buy’s shares 5 years ago would now be looking at an investment worth $650.03.
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