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Resilient Trader
Resilient Trader is where smart traders come for vetted ideas.
Every week, we cut through the noise and surface opportunities that institutions are already eyeing, but with strategies tailored for retail traders. Today's setup? A retailer that beat, raised its full-year guidance, and still has 19 of 25 Wall Street analysts saying "Hold." The stock just pulled back 8% from its high and is sitting just above its 50-day moving average.
We'll cover:
Why Best Buy is a Buy at $89.00 or better
Why the easiest holiday compare in years sits right in front of it
How one defined-risk call spread plays the November earnings print
🔍 Trade Thesis: America's Pandemic Laptops Are Getting Old
In 2020 and 2021, everyone bought a laptop, a monitor and a new TV at the same time. Those devices are now five and six years old. Best Buy is where a lot of that replacement demand lands, and it is starting to show up in the numbers.
Second-quarter comparable sales grew 4.1%, against a full-year guide going in of -1% to +1%. Management raised full-year comparable sales guidance to +1.9% to +3.0% and adjusted EPS to $6.70 to $6.90. The stock opened down 8% on the report anyway.
Behind the scenes:
💻 The upgrade cycle is real: computing and home theater led growth, and management credited new products for the acceleration.
🎄 The easiest holiday in years: last year's holiday quarter comps fell 0.8%. That is the bar Best Buy has to clear this winter.
🕶️ New categories are working: AI glasses and trading cards were named growth drivers, offsetting a weak gaming business.
💵 You get paid to wait: a $0.96 quarterly dividend, a 4.3% yield, and $300 million of buybacks planned this year.
👔 A new CEO: Jason Bonfig takes over from Corie Barry on November 1, so the November print is his first as CEO.
$$BBY ( ▲ 0.47% ) trades at about 13 times the midpoint of its own raised guidance, and the Street's average price target sits below the current price. When the analysts are this far behind the numbers, upgrades tend to follow the next beat.
The honest bear case: this is a consumer stock in a hostile rate market. The 10-year Treasury yield topped 5.1% on September 23, its highest level since 2007. Best Buy's margin is thin (guided at 4.4% to 4.5% operating), computing prices are rising, which can choke demand, and a new CEO could reset expectations lower on day one.
📊 Overview & Key Metrics
Metric | Figure |
|---|---|
Current Price | $88.75 |
Market Cap | $18.6 billion |
Trailing / Forward P/E | 15.1 / 12.9 |
Dividend | $3.84 per year (4.3% yield) |
Q2 Revenue | $9.78 billion (+3.6%) |
Q2 Comparable Sales | +4.1% (domestic +4.5%) |
FY27 Adj. EPS Guide | $6.70 to $6.90 (raised from $6.30 to $6.60) |
52-Week Range | $55.10 to $96.53 |
Analyst Consensus | Hold (19 of 25), $86.70 average target |
Next Earnings | Late November (last year: November 25) |
📡 Market Sentiment & Fundamental Drivers
The quarter was better than the headline reaction. Enterprise revenue rose to $9.78 billion from $9.44 billion. Operating income rate jumped to 4.3% from 2.7%. Domestic online comparable sales grew 5.1% and now make up about a third of sales. The balance sheet is clean, with $2.26 billion of cash against $1.16 billion of long-term debt.
Sentiment has not caught up. The consensus rating is still Hold, and the average target is below where the stock trades. At least one institutional research desk we follow added Best Buy to its long list last week, calling it one of the few consumer names where the data is improving, not deteriorating.
📐 Technical Analysis
After the earnings dip to $76.70, the stock rallied 26% to a new 52-week high of $96.53 on September 23, then got caught in the rate-driven selloff. It has given back about 8% since.
Moving Averages:
✅ Holding above the 50-day at $87.47, the line buyers need to defend
✅ Below the 20-day at $90.53, which is the short-term pullback that gives us the entry
✅ Far above the 200-day at $72.74, so the bigger uptrend is intact
✅ RSI near 48, neutral and nowhere near overbought
Key Levels:
Support: $86.77 (the September 10 low), then $84
Resistance: $91, then the 52-week high at $96.53
The Setup: a stock that went from $76.70 to $96.53 in four weeks is now back at its 50-day with nothing changed in the business. That is the pullback you wait for.
🧠 SWOT & Who Should Take This Trade
Strengths: comps accelerating, guidance raised, a 4.3% dividend yield, and more cash than long-term debt.
Weaknesses: razor-thin retail margins and a beta of 1.31, so this stock moves more than the market in both directions.
Opportunities: an easy holiday compare, a clean first quarter for the new CEO, and analyst upgrades chasing the numbers.
Threats: 10-year yields above 5%, a weaker consumer, higher device prices choking demand, and online players taking share.
Who should take this: traders who want a dividend-paying consumer name with a dated catalyst, and who can hold through a rate-driven wobble. If you need the chart to confirm first, wait for a close back above $91.
💥 Trade of the Week: Buy the Upgrade Cycle at the 50-Day
🟢 Stock Trade
Buy $$BBY ( ▲ 0.47% ) at $89.00 or better
🛡️ Options Play: Buy the January 15, 2027 $90/$100 Call Spread
Buy the Jan. 15, 2027 $90 Call
Sell the Jan. 15, 2027 $100 Call
Net debit: $3.40 or better ($340 per contract)
Why this structure: the earnings print lands in late November, so this is defined risk only. Implied volatility is in the mid-40s, which makes outright calls pricey, so we sell the $100 strike to cut the cost. December 18 is the shortest expiry past the print, but the January 15 spread is actually cheaper at the midpoint, so we take the extra four weeks of holiday-season time for free.
Risk-Reward Breakdown - Jan. 15, 2027 $90/$100 Call Spread
Item | Figure |
|---|---|
Net Debit | $3.40 per share ($340 per contract) |
Max Risk | $340 per contract |
Max Reward | $6.60 per share ($660 per contract) |
Breakeven | $93.40 (below the September 14 close of $94.83) |
Return on Risk | 194% at $100 or above |
Days to Expiration | 107 |
Payoff Table - Jan. 15, 2027 $90/$100 Call Spread
BBY at Expiration | Spread Value | Profit / Loss | Return |
|---|---|---|---|
$88.75 | $0.00 | -$340 | -100% (Entry) |
$90.00 | $0.00 | -$340 | -100% |
$93.40 | $3.40 | $0 | 0% (Breakeven) |
$95.00 | $5.00 | +$160 | +47% |
$96.53 | $6.53 | +$313 | +92% (52-Week High) |
$98.00 | $8.00 | +$460 | +135% |
$100.00 | $10.00 | +$660 | +194% (Max Gain) |
$105.00 | $10.00 | +$660 | +194% |
How it works: you own the right to buy Best Buy at $90 and have sold someone the right to buy it from you at $100. Everything between those strikes is yours, and your entire risk is the $340 you pay on day one. The stock only has to get back to where it traded two weeks ago to break even. Note: these markets are wide. Use a limit order near the midpoint and never pay the offer.
🛑 Risk Management Tip
Use $84 as the hard risk line on the shares. That is below the 50-day, below the September 10 low, and about 5.6% under our entry. A decisive close beneath it says the rate selloff is winning over the upgrade cycle, and we step aside. Size at 1% to 2% of your account. On the spread your risk is already capped, so the rule is simpler: buy only what you can afford to see go to zero.
🚀 Catalysts to Watch
1. CEO Handoff (November 1) - Jason Bonfig takes over from Corie Barry. Watch for any early strategy update.
2. Third-Quarter Earnings (late November, date not yet confirmed) - the first print under the new CEO and the first look at holiday guidance.
3. Black Friday and Holiday Season - Best Buy only has to beat last year's 0.8% decline.
4. Analyst Upgrades - with 19 of 25 on Hold, every beat forces a rethink.
5. Rates - a pullback in the 10-year yield from its highest level since 2007 would take the brakes off every consumer stock.
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🧠 Final Thoughts
Best Buy is not a glamour stock. It sells laptops, TVs and phone chargers to people whose old ones finally quit. That is exactly the point: the devices America bought in 2020 and 2021 are wearing out, and the numbers are already turning.
The company beat and raised in August, the stock fell on the news, rallied to a new high, and has now come back to its 50-day in a rate scare. The easiest holiday compare in years and a new CEO's first quarter are both on the calendar.
$$BBY ( ▲ 0.47% ) pays you 4.3% to wait, trades at about 13 times its own guidance, and most of Wall Street still has it on Hold.
✅ Buy $$BBY ( ▲ 0.47% ) at $89.00 or better
💸 Buy the Jan. 15, 2027 $90/$100 call spread for a $3.40 net debit
We'll be watching this one closely.
(Prices and option quotes are as of the September 29, 2026 close. Verify with live brokerage prices before entering.)
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Disclaimer: This publication is for educational purposes only and is not investment advice. Options involve risk and are not suitable for all investors. Do your own research and consider consulting a licensed financial professional.
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