Steer Clear of this Retail Stock in December

BBY could reverse its current winning streak

Deputy Editor
Dec 1, 2022 at 10:38 AM
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Best Buy Co Inc (NYSE:BBY) is marginally higher this morning, last seen up 0.2% to trade at $85.47. The shares have been on a bit of a hot streak of late, and are heading for their fourth-straight daily win as they look to add to an impressive 35.5% quarterly lead. However, BBY is still down 15.7% in 2022, and there's reason to believe these losses could increase before the year's end.

Specifically, Best Buy stock just landed on Schaeffer's Quantitative Analyst Rocky White's list of 25 stocks with the worst returns in December. Per the data, BBY is the second-worst performing stock during the month, and the worst retail stock to own. In addition, the equity finished December positive just twice over the last 10 years, and averaged a 3.1% loss. 

Analysts are already relatively pessimistic towards the equity, but there's room for optimism to unwind. Specifically, four the 19 in coverage still recommend a "strong buy" rating. Meanwhile, the 12-month consensus target price of $81.50 is a 4.7% discount to BBY's current perch.

Now seems to be a prime time to weigh in on Best Buy stock with options. That's because security's Schaeffer's Volatility Index (SVI) of 36% sits in the 13th percentile of its annual range. This means option traders are pricing in relatively low volatility expectations at the moment.


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