When upgrading shares of Best Buy (NYSE:BBY) on February 19, Stifel Nicolaus analyst David Schick cited improved management as the reason for his decision to lift his rating from a Hold to Buy. In the accompanying research note seen by Barron’s, he wrote that the company’s new chief executive officer, Hubert Joly, was “making tough decisions and stressing simple, measurable financial goals and operational accountability.”
Joly was hired by Best Buy’s board at the beginning of September to strengthen its operational and financial performance. He was tasked with reducing costs by $750 million, and the electronic retailer’s chief executive took a significant step towards that goal on Tuesday. The company announced that it would be eliminating 400 jobs at its headquarters in Richfield, Minnesota, for an estimated savings of $150 million.
Best Buy will report fourth-quarter earnings in two days, and investors will know whether the company’s recent analysts upgraders were warranted. Analysts at Stifel Nicolaus and Barclays Capital — who have both raised their price targets and ratings on shares of the electronics retailer recently — have predicted that the company’s business will show signs of reviving as the effects of showrooming are being mitigated by changes in the technology landscape.
Now that Apple’s (NASDAQ:AAPL) iPhone is not quite as dominant as is once was, with other vendors like Google’s (NASDAQ:GOOG) Android and Microsoft’s (NASDAQ:MSFT) Windows Phone 8-based devices accounting for a greater portion of smartphones sales, Best Buy provides an opportunity for shoppers to look at all their options. To take advantage of this phenomenon, Joly has been closing big box stores and expanding into smaller outlets that sell mobile phones, a move that competitor Amazon (NASDAQ:AMZN) cannot make…