Best Buy, Wayfair added to positive catalyst watch at JPMorgan
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Investing.com -- JPMorgan has added Best Buy (NYSE:BBY) and Wayfair (NYSE:W) to its Positive Catalyst Watch, citing improving sales trends, attractive valuations, and tariff-related risk that appears more manageable than feared.
In a note to clients, JPMorgan analysts said they expect “the combination of attractive valuation/levels and improving sales trends to spark investor interest into the back-to-school and earnings season.”
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The firm maintained Overweight ratings on both stocks, placing them in the “higher risk bucket” of its retail coverage.
On Best Buy, analysts noted that recent weakness has opened a buying opportunity.
“The stock is trading at trough valuation as hedge funds blew out of longs on the miss and is now at 10.5x PE and ~5x EV/EBITDA on 2025 vs historical averages of 13.5x and 7x.”
While some investors question whether the stock was “more than a trade,” JPMorgan said it is “highly worth the risk-reward at this price.”
The firm also pointed to several catalysts, including the upcoming Nintendo Switch launch and seasonal strength from back-to-school. “Computing, tablets, and mobile continue to comp positive,” analysts wrote.
On Wayfair, JPMorgan pushed back on concerns about tariff exposure, noting that the company “bears high risk on tariffs (which it does not as it’s a marketplace).”
Analysts said trends have improved and gross margins should recover in the back half of the year after inventory front-loading.
More broadly, JPMorgan sees a resilient consumer and “positive cadence” across retailers in the first quarter.
“Most retailers experienced a positive cadence throughout 1Q… and appear positioned to beat over the course of 2025,” the firm wrote.
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