Best Buy Stock: 4 Experts Argue Pros and Cons of ‘Buying the Dip’ Amid Trump Tariff Drama
This article was originally featured on AOL, GoBankingRates, NASDAQ, and Yahoo!
To call the stock market “volatile” over the past two months would be an understatement. Still, volatility sometimes creates buying opportunities. Best Buy (BBY) stock has fallen roughly 37% in the past six months, and most of that came in the past six weeks.
If you’ve been considering buying Best Buy stock, does now offer a good opportunity to buy? Here’s what stock experts have to say about buying this stock amid the tariff drama.
Pro: It’s Trading Below Market Value
At its current price ($61.23 as of April 17), Best Buy could be underpriced.
“The stock is currently trading below its fair value,” said John Murillo, chief dealing officer of B2BROKER. “While there is a potential upside if and when the sentiment towards the tariff talks improves, it’s not immediate or guaranteed.”
The consensus on stock analysis platform Zacks agrees, with an average brokerage recommendation of 2.17 (out of five, with five representing a “Strong Sell” recommendation). Best Buy also has a low price-to-earnings ratio of just 9.35, according to Morningstar.
Con: Vulnerable to Tariffs
Murillo cautioned, however, that Best Buy remains extremely exposed to tariffs on Chinese imports. “Let’s not forget that the biggest U.S. electronics and home appliances retailer was punished for a reason — namely, tariffs. Best Buy faces harsh headwinds since most of its retail items are imported from China,” he said.
That said, it remains to be seen exactly how those tariffs will unfold. Javier Palomarez, CEO of the U.S. Hispanic Business Council, pointed out just how quickly the tariff rules keep changing. “While Best Buy was initially impacted by the extreme tariffs on China, we have since seen various exemptions for smartphones and other electronics,” he said.
Just beware that trying to predict the final tariff tally remains pure speculation at this point.
Con: Higher Recession Risk
Electronics retailers like Best Buy are vulnerable to recessions. And the risk of recession looks awfully high right now, with J.P. Morgan forecasting it at 60%, per Reuters.
“Though initially driven by speculation, Best Buy’s stock dip could be worsened by the development of a recession,” Palomarez said.
Con: Dim Long-Term Outlook
Even before all the talk of tariffs and heightened recession risk, Best Buy hadn’t exactly impressed with its performance. “Best Buy has been lagging behind investors’ expectations for many quarters in a row,” Murillo said. “Their fiscal year 2024 sales came in at $13.9 billion, posting a drop of 5%.”
David Capablanca, stock trader and host of “The Friendly Bear” podcast, also sees reason for pessimism. “Best Buy could end up like Blockbuster Video in the early 2000s, just phasing out. They’ve been cutting down on their stores, and with Amazon and other online retailers eating into their business, I don’t think Best Buy is a good long-term hold.”
Con: Timing the Market Is Always Hard
When you try to outsmart the rest of the market by timing it right, you have to be right twice. You have to buy near the bottom and then sell near the top, and in the moment, neither of them feels like the bottom or the top.
Chad Gammon, owner of Custom Fit Financial, emphasized this point: “Whether it’s Best Buy stock or other stocks or funds, we don’t advise buying at perceived dips. Market timing is extremely difficult, even for professionals.”
Instead, consider dollar-cost averaging. Buy the stocks or funds that you like at regular intervals — such as every paycheck — and then simply let time and compound returns do the heavy lifting for you.