Piper is raising its Q1 EPS estimates for Best Buy (BBY) from $0.37 to $0.40 on strong May sales. The firm’s checks indicate May sales were were boosted by robust sales in computers, video game hardware and software, flat panel TVs, and mobile phones.
This strength is likely a result of the tax rebate steroid shot that Jeffries mentioned yesterday. So what happens when the rebate boost ends? Consumer products that are not necessities (e.g., electronics) will likely see a steep drop-off in spending. With consumer confidence at its lowest in 16 years, these strong retail numbers aren’t likely to be sustainable, especially in electronics.
Piper maintains BUY on Best Buy (BBY). [We don’t.]