• In early February 2026, JPMorgan analyst Christopher Horvers downgraded Best Buy to Neutral from Overweight, citing weaker near-term performance and ongoing industry headwinds in key electronics categories.
• The downgrade highlighted specific pressure points, including softer computing, TV, and appliance demand and rising memory costs, that could weigh on Best Buy’s operating backdrop.
• Next, we’ll examine how JPMorgan’s reduced confidence in Best Buy’s core electronics categories shapes the company’s broader investment narrative.

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What Is Best Buy's Investment Narrative?

To own Best Buy today, you have to believe its mix of physical stores, services and online capabilities can still earn a solid return on capital even as core electronics categories feel cyclical and competitive pressure. The JPMorgan downgrade lands right on that tension: it calls out softer demand in computing, TVs and appliances, plus higher memory costs, which directly challenge earlier expectations for modest comp growth and recovering profitability. That could make near term earnings more volatile than prior consensus implied and puts more weight on management’s ability to control costs, grow services and keep investing in the store base without stretching the balance sheet or dividend. In other words, the big picture story has not disappeared, but the path through the next few quarters may be bumpier than the pre-downgrade setup suggested.

However, investors also need to weigh how persistent margin pressure could affect that outlook. Despite retreating, Best Buy's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Six Simply Wall St Community fair value views span roughly US$53 to US$146 per share, reflecting sharply different expectations, particularly around the very high forecast return on equity and current category headwinds highlighted by JPMorgan’s downgrade.

Explore 6 other fair value estimates on Best Buy - why the stock might be worth over 2x more than the current price!

Build Your Own Best Buy Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Best Buy research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Best Buy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Best Buy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.