BBY
Best Buy Co., Inc.
$81.65
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 2.7% above fair value
You pay
$81.65
Bear
$69.60
Fair
$79.54
Bull
$89.48
Bear
$69.60
-14.8%
$5.04 × 14x P/E
Fair
$79.54
-2.6%
$5.04 × 16x P/E
Bull
$89.48
+9.6%
$5.04 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
16.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $76.90 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $79.54 per share.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples