Best Buy Stock Down Again After CEO Shake-Up

The stock snapped its four-week winning streak last week

by Lillian Currens

Published on Apr 15, 2019 at 10:08 AM

The shares of Best Buy Co Inc (NYSE:BBY) are down slightly in early trading after the electronics retailer announced that current Chief Financial Officer (CFO) Corie Barry would take the place of Hubert Joly as CEO. Joly has served as CEO since 2012, and is stepping down to serve as the executive chairman of the company. As a result, BBY stock is off 0.6% at $73.15, pacing for its fifth straight loss -- its longest losing streak since December.

Despite the stock's recent dip, BBY is up 38% this year, largely thanks to a post-earnings bull gap in late February. However, the equity's rally was capped by the $75 level, which has served as an area of pressure on the charts since early October. What's more, the equity snapped its four-week winning streak last week. 

Analysts are approaching Best Buy with caution. Currently, BBY has 12 "hold" ratings, and four "strong buys." Plus, the consensus 12-month target price of $76.97 represents a slim 5% premium to current levels. Earlier today, though, Loop Capital reiterated its "buy" rating and $88 price target, saying it's "encouraged by Best Buy's management succession plan."

Options traders have taken a much more optimistic stance. In the last 10 days 2.5 calls have been bought to open for every put on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Plus, this ratio sits higher than 96% of all readings from the past year, meaning calls have been bought over puts at a much quicker-than-usual clip. 

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