Wedbush Initiates Coverage of Best Buy (BBY) with Neutral Rating

On Friday, Wedbush initiated coverage on Best Buy Co. Inc. (NYSE:BBY) with a Neutral rating and a price target of $75, which was down from a previous target of $83.

This assessment comes ahead of Best Buy’s upcoming quarterly results for Q1 FY2026. Wedbush observed a 12% increase in Best Buy shares over the past month and attributed this to easing investor concerns regarding tariffs.

A busy retail store showcasing a wide range of consumer electronics.

However, Wedbush emphasized that the remaining tariffs still pose a significant headwind due to Best Buy’s considerable exposure to Chinese imports. While acknowledging positive developments in the building product replacement and innovation cycle, Wedbush believes that the tariff overhang creates an unattractive near-term risk/reward scenario for the shares.

For FY2026, Best Buy expects revenue between $41.4 billion and $42.2 billion, with comparable sales growth ranging from flat to 2%. Despite better-than-expected FQ4 sales and earnings, Best Buy experienced a 2.3% comparable sales decline on a 52-week basis due to a softer sales environment. Furthermore, the FY2026 guidance does not account for the impact of recently enacted tariffs, which could negatively affect sales and profitability. Best Buy Co. Inc. (NYSE:BBY) offers technology products and solutions

While we acknowledge the potential of BBY to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BBY and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.