How Will Best Buy Move After Earnings?

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Best Buy (BBY) is expected to report earnings on Tuesday, August 24th. The whisper number is $0.35, one cent ahead of the analysts’ estimate and showing some confidence from the WhisperNumber community. Whispers range from a low of $0.30 to a high of $0.39. Best Buy has a 66% positive surprise history (having topped the whisper in 33 of the 50 earnings reports for which we have data).

Earnings history:

– Beat whisper: 33 qtrs
– Met whisper: 0 qtrs
– Missed whisper: 17 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

BBY815A

The strongest price movement of +5.0% comes within thirty trading days when the company reports that beat the whisper number, and -3.6% within thirty trading days when the company reports earnings that miss the whisper number. The overall average post earnings price move through thirty trading days is ‘as expected’ (beat the whisper number and see strength, miss and see weakness) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:

BBY815B

The company has reported earnings ahead of the whisper number in all of the past four quarters with a whisper number. In the comparable quarter last year the company reported earnings seventeen cents ahead of the whisper number. Following that report the stock realized a 4.6% gain in five trading days. Last quarter the company reported earnings fourteen cents ahead of the whisper number. Following that report the stock realized a 2.8% gain in ten trading days. Overall historical data indicates the company to be (on average within thirty trading days) an ‘as expected’ price reactor when the company reports earnings.

WhisperNumber provides detailed earnings analysis and earnings trade alerts. Learn more here.

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