Analyst Maintains 'Neutral' Rating on Best Buy, Citing Virus-Related Supply Chain Disruptions
Best Buy has done an “admirable job mitigating the impact of tariffs,” Wedbush Securities analyst Michael Pachter wrote investors Thursday, but pressure from tariffs will “swiftly shift to pressure from supply chain disruption” at least through the first half. Supply…
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chain problems due to the coronavirus are an “elevated concern” for the retailer, with the full impact of disruptions currently unknown, Pachter said. About 60% of Best Buy’s cost of goods sold originated in China last year, “but should be closer to 40%” in 2020, said Pachter, “still highly exposed in our view.” He affirmed the $43 billion company’s perception (see 2002270034) that it will be among the highest priority retailers to receive goods from China, making its risk “lower than any smaller retailer or online seller” other than Amazon.