BBY Best Buy Earnings Report 08/29/17 – Weekly ElliottWave Count

BBY Best Buy Inc. (NYSE:BBY) earnings report is due this week on Aug. 29 before the market opens. 

The earnings report will be for the fiscal Quarter ending July 2017. According to Zacks Investment Research, based on 12 analysts’ forecasts, the consensus EPS forecast for the quarter is $0.63. The reported EPS for the same quarter last year was $0.57.

Best Buy shares have been surging this year, although many investors thought  it was in big trouble because of threats from Amazon. The stock is up by 55% this year and up by approximately 240% since the company named Hubert Joly as its CEO five years ago.

The main reasons why BBY Best Buy has been surging are the Nintendo Switch console launch and that Best Buy proved Amazon-proof in contrast with Circuit City and RadioShack

Despite the very encouraging data, it is worth mentioning that  BBY stock's performance is well behind Amazon's (AMZN) performance. Since August 2012, AMZN stock is up by 300% yet if we account the S&P 500 is up by 75% during the same time frame and while the S&P Retail ETF (XRT) has risen only 25%, BBY Best Buy still showed an astonishing performance.

Coming back to the earnings subject, Jefferies raised Best Buy sales and earnings estimates on Tuesday for the second quarter, citing strength in the video game, appliance and smartphone categories.

“Based on our field checks and other research, we believe Best Buy should be able to grow domestic SSS [same-store sales] at the high end or better than mgmt.’s plan,” analyst Daniel Binder wrote in a note to clients. “We expect Best Buy to benefit from strength in appliances and connected home, however we also expect robust growth in entertainment from the introduction of two gaming consoles in Q1 and mobile to benefit from a full quarter of Samsung S8/S8+ availability.”

“We believe that Best Buy’s entertainment category saw a second consecutive quarter of robust growth driven by the launch of the Nintendo Switch and the 1TB PlayStation Slim Gold console as the company laps fairly significant comparable store sales declines in this category,” he wrote.

As a result, the analyst raised his July quarter Best Buy U.S. same-store sales growth estimate to 2.5 percent from 2.0 percent. He also increased his earnings-per-share forecast for the same quarter to 66 cents from 59 cents versus the Wall Street consensus of 63 cents.

Our View 

When it comes to our BBY’s stock price analysis, Best Buy is still a buy on the dip on the weekly time frame while still missing the minimum target of the 70’s level. The 70’s price target is the equal legs of the (w) – (x) swing since the stock first started trading. The rally since December 2012 as well seems incomplete. Price took the equal legs at the 56’s zone but RSI yet to show divergence, a fact suggesting we are most likely going to see the next level at the 1.236% extension around the 66’s, just $4 from the equal legs at 70’s mentioned above.

 

BBY Best Buy Weekly Elliott Wave Count

BBY Best Buy Weekly Elliott Wave Count

At this stage we would like to see price correcting down to the 56’s zone where the supporting trend line since June 1, 2016 is holding. From there we expect price to bounce and ideally extend to new highs towards our target or at least create a 3 wave bounce which should provide longs the ability to get Risk Free.