Best Buy Co., Inc.

BBY

Consumer CyclicalSpecialty RetailNYSE

$59.40

Market Cap: $12.45B

Best Buy Co., Inc. (BBY) Valuation Summary

Updated May 9, 2026 07:46

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$86.56 – $475.12	$145.08	+144.2%
Growth Exit 10Y	$81.64 – $395.53	$129.82	+118.5%
EBITDA Exit 5Y	$106.77 – $211.88	$154.96	+160.9%
EBITDA Exit 10Y	$93.82 – $191.44	$135.54	+128.2%
▸ Trading Multiples
P/E	$104.58 – $161.38	$127.33	+114.4%
EV/EBITDA	$134.03 – $191.71	$137.98	+132.3%
EV/Revenue	$276.06 – $416.05	$389.17	+555.2%
▸ PEG
PEG Fair Value	$128.54 – $128.54	$128.54	+116.4%
▸ Earnings Power Value
Earnings Power Value	$72.07 – $119.38	$90.49	+52.3%
▸ Dividend Discount
Dividend Discount	$56.59 – $132.08	$81.73	+37.6%

Valuation History

DCF Analysis

Fair Value

$145.08

Market Price

$59.40

Upside / Downside

+144.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $145.08 per share, suggesting BBY is undervalued by 144.2% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	2,039
(−) Net Interest	40	41	41	42	43	44
(+) D&A	774	771	732	722	732	750
EBITDA	2,683	2,707	2,702	2,720	2,764	2,833

(−) Tax	432	438	446	452	460	472
(−) CapEx	722	733	746	756	769	788
(−) ΔWC	-588	14	17	14	17	17
Free Cash Flow (FCFF)	2,116	1,523	1,493	1,497	1,518	1,556

Terminal Value						36,313
WACC / Discount Rate	6.8%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	26,153

Enterprise Value	33,167
Projection Period	7,014	21.1%
Terminal Value	26,153	78.9%

(−) Current Net Debt	2,395

Equity Value	30,772
(/) Outstanding Shares	212

Fair Price	$145.08

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.8%	$200	$232	$277	$349	$475
5.8%	$152	$169	$191	$221	$265
6.8%	$122	$132	$145	$161	$183
7.8%	$101	$108	$117	$126	$139
8.8%	$87	$91	$97	$104	$112

Current price: $59.40. Green = undervalued, Red = overvalued.

Fair Value

$129.82

Market Price

$59.40

Upside / Downside

+118.5%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (61% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $129.82 per share, suggesting BBY is undervalued by 118.5% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	1,912	1,864	1,843	1,847	1,877	1,924
(−) Net Interest	40	41	41	42	43	41	40	39	40	40	41
(+) D&A	774	771	732	722	732	745	749	746	740	731	749
EBITDA	2,683	2,707	2,702	2,720	2,764	2,698	2,652	2,628	2,626	2,649	2,715

(−) Tax	432	438	446	452	460	442	431	426	427	434	445
(−) CapEx	722	733	746	756	769	739	721	712	714	726	744
(−) ΔWC	-588	14	17	14	17	-39	-24	-11	2	15	15
Free Cash Flow (FCFF)	2,116	1,523	1,493	1,497	1,518	1,555	1,525	1,500	1,483	1,473	1,510

Terminal Value											35,245
WACC / Discount Rate	6.8%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	1,084	995	917	849	790	18,281

Enterprise Value	29,929
Projection Period	11,649	38.9%
Terminal Value	18,281	61.1%

(−) Current Net Debt	2,395

Equity Value	27,534
(/) Outstanding Shares	212

Fair Price	$129.82

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.8%	$184	$209	$244	$298	$396
5.8%	$141	$153	$169	$192	$223
6.8%	$114	$121	$130	$141	$156
7.8%	$95	$100	$105	$112	$120
8.8%	$82	$85	$88	$93	$98

Current price: $59.40. Green = undervalued, Red = overvalued.

Fair Value

$154.91

Market Price

$59.40

Upside / Downside

+160.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $154.96 per share, suggesting BBY is undervalued by 160.9% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

EV/EBITDA Exit Multiple

13.84x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	2,039
(−) Net Interest	40	41	41	42	43	44
(+) D&A	774	771	732	722	732	750
EBITDA	2,683	2,707	2,702	2,720	2,764	2,833

(−) Tax	432	438	446	452	460	—
(−) CapEx	722	733	746	756	769	—
(−) ΔWC	-588	14	17	14	17	—
Free Cash Flow (FCF)	2,116	1,523	1,493	1,497	1,518	—

Peers' EBITDA Multiple						13.8x
Terminal Value						39,209
WACC / Discount Rate	6.79%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	28,238

Enterprise Value	35,252
Projection Period	7,014	19.9%
Terminal Value	28,238	80.1%

(−) Current Net Debt	2,395
Equity Value	32,857
(÷) Outstanding Shares	212M
Fair Price	$155	+160.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.8x	11.8x	13.8x	15.8x	17.8x
4.8%	$127	$148	$170	$191	$212
5.8%	$122	$142	$162	$182	$202
6.8%	$116	$136	$155	$174	$193
7.8%	$111	$130	$148	$167	$185
8.8%	$107	$124	$142	$159	$177

Current price: $59.40. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$135.51

Market Price

$59.40

Upside / Downside

+128.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (63% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.8x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $135.54 per share, suggesting BBY is undervalued by 128.2% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

EV/EBITDA Exit Multiple

13.84x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	1,912	1,864	1,843	1,847	1,877	1,924
(−) Net Interest	40	41	41	42	43	41	40	39	40	40	41
(+) D&A	774	771	732	722	732	745	749	746	740	731	749
EBITDA	2,683	2,707	2,702	2,720	2,764	2,698	2,652	2,628	2,626	2,649	2,715

(−) Tax	432	438	446	452	460	442	431	426	427	434	—
(−) CapEx	722	733	746	756	769	739	721	712	714	726	—
(−) ΔWC	-588	14	17	14	17	-39	-24	-11	2	15	—
Free Cash Flow (FCF)	2,116	1,523	1,493	1,497	1,518	1,555	1,525	1,500	1,483	1,473	—

Peers' EBITDA Multiple											13.8x
Terminal Value											37,572
WACC / Discount Rate	6.79%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	1,084	995	917	849	790	19,488

Enterprise Value	31,136
Projection Period	11,649	37.4%
Terminal Value	19,488	62.6%

(−) Current Net Debt	2,395
Equity Value	28,741
(÷) Outstanding Shares	212M
Fair Price	$136	+128.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.8x	11.8x	13.8x	15.8x	17.8x
4.8%	$127	$143	$159	$175	$191
5.8%	$118	$132	$147	$161	$176
6.8%	$109	$122	$136	$149	$162
7.8%	$101	$113	$125	$137	$149
8.8%	$94	$105	$116	$127	$138

Current price: $59.40. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$127.33

Market Price

$59.40

Upside / Downside

+114.4%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $127.33 based on 8 comparable companies in the Specialty Retail industry.

P/E Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Best Buy Co., Inc.BBY	12,599	11.8x	9.2x
Casey's General Stores, Inc.CASY	31,859	58.7x	47.5x
Williams-Sonoma, Inc.WSM	21,830	20.7x	21.7x
Packaging Corporation of AmericaPKG	19,933	26.0x	22.5x
Burlington Stores, Inc.BURL	19,132	32.0x	31.1x
DICK'S Sporting Goods, Inc.DKS	18,773	22.6x	15.8x
Amcor plcAMCR	18,449	25.0x	11.0x
Yum China Holdings, Inc.YUMC	16,896	19.2x	20.8x
Lululemon Athletica Inc.LULU	15,389	9.9x	10.1x
Industry Median		23.8x	21.2x
(*) Profit after tax		1,069	1,375
Equity Value		25,445	28,569
(/) Outstanding shares		212	212
Fair Price		$120	$135

Selected Fair Value (avg of trailing + forward)

$127.33

+114.4%

Fair Value

$137.98

Market Price

$59.40

Upside / Downside

+132.3%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $137.98 based on 9 comparable companies in the Specialty Retail industry.

EV/EBITDA Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Best Buy Co., Inc.BBY	12,599	6.6x	6.6x
Casey's General Stores, Inc.CASY	31,859	28.7x	26.6x
Williams-Sonoma, Inc.WSM	21,830	13.5x	13.9x
Packaging Corporation of AmericaPKG	19,933	13.5x	13.4x
Burlington Stores, Inc.BURL	19,132	18.9x	19.0x
DICK'S Sporting Goods, Inc.DKS	18,773	13.8x	10.7x
Amcor plcAMCR	18,449	18.5x	18.4x
Yum China Holdings, Inc.YUMC	16,896	10.3x	10.7x
Lululemon Athletica Inc.LULU	15,389	5.6x	5.7x
Genuine Parts CompanyGPC	14,569	29.7x	29.7x
Industry Median		13.8x	13.9x
(*) EBITDA		2,282	2,285
= Enterprise Value		31,594	31,729
(-) Net Debt		2,395	2,395
Equity Value		29,199	29,334
(/) Outstanding shares		212	212
Fair Price		$138	$138

Selected Fair Value (avg of trailing + forward)

$137.98

+132.3%

Fair Value

$389.17

Market Price

$59.40

Upside / Downside

+555.2%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $389.17 based on 9 comparable companies in the Specialty Retail industry.

EV/Revenue Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Best Buy Co., Inc.BBY	12,599	0.4x	0.4x
Casey's General Stores, Inc.CASY	31,859	2.2x	2.0x
Williams-Sonoma, Inc.WSM	21,830	2.9x	2.9x
Packaging Corporation of AmericaPKG	19,933	2.6x	2.6x
Burlington Stores, Inc.BURL	19,132	2.1x	2.1x
DICK'S Sporting Goods, Inc.DKS	18,773	1.5x	1.1x
Amcor plcAMCR	18,449	2.2x	2.2x
Yum China Holdings, Inc.YUMC	16,896	1.6x	1.7x
Lululemon Athletica Inc.LULU	15,389	1.4x	1.4x
Genuine Parts CompanyGPC	14,569	0.9x	0.9x
Industry Median		2.1x	2.0x
(*) Revenue		41,691	41,749
= Enterprise Value		86,162	83,716
(-) Net Debt		2,395	2,395
Equity Value		83,767	81,321
(/) Outstanding shares		212	212
Fair Price		$395	$383

Selected Fair Value (avg of trailing + forward)

$389.17

+555.2%

PEG Fair Value

Fair Value

$128.54

Market Price

$59.40

Upside / Downside

+116.4%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 19.8% plus 6.4% dividend yield, the company has a fair value of $128.54 based on NTM EPS (FY2027) of $6.48. The current PEG ratio is 0.46.

PEG Ratio

0.46Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.2 ÷ (13.4% + 6.4%) = 0.46

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	13.4%
Dividend Yield	+6.4%
Adjusted Growth (clamped 8–25%)	19.8%
Fair P/E	19.8x
NTM EPS (FY2027)	$6.48
Fair Value	$128.54

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2026 (actual)	$5.04	—	—
FY2027E	$6.48	+28.6%	17
FY2028E	$7.00	+8.0%	17
FY2029E	$7.67	+9.5%	9
FY2030E	$8.69	+13.3%	4
FY2031E	$9.45	+8.7%	3

5Y Forward EPS CAGR: 13.4%

Historical Growth

Year	Net Income	EPS	YoY
FY2022	$2.5B	$9.84	—
FY2023	$1.4B	$6.29	-36.1%
FY2024	$1.2B	$5.68	-9.7%
FY2025	$927.0M	$4.28	-24.6%
FY2026	$1.1B	$5.04	+17.8%

4Y Historical EPS CAGR: -15.4%

Earnings Power Value

Fair Value

$90.49

Market Price

$59.40

Upside / Downside

+52.3%

Verdict

Undervalued

Using the Earnings Power Value framework with a WACC of 6.8% and normalized earnings of $1.5B, the company has a fair value of $90.49 per share. The EPV range is $72.07 – $119.38 based on WACC sensitivity (5.3% – 8.3%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,465	1,465	1,465
(/) WACC	8.3%	6.8%	5.3%
Enterprise Value	17,680	21,589	27,716
(-) Net debt	2,395	2,395	2,395
Equity Value	15,285	19,194	25,321
(/) Outstanding shares	212	212	212
Fair Price	$72.07	$90.49	$119.38

Dividend Discount Model

Fair Value

$81.73

Market Price

$59.40

Upside / Downside

+37.6%

Verdict

Undervalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 8.8% and projected dividend growth of 9.0%, the fair value is $81.73 per share. The DDM range is $56.59 – $132.08 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$3.78

Dividend Yield

6.44%

Payout Ratio

74.9%

Dividend Coverage

1.33x

FCF Payout Ratio63.7%

DPS CAGR (4Y)8.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2026	$3.78	74.9%	+1.4%
2025	$3.73	87.1%	+1.6%
2024	$3.67	64.5%	+4.9%
2023	$3.50	55.6%	+26.7%
2022	$2.76	28.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2027	$4.12	9.0%	0.9195	$3.79
2028	$4.49	9.0%	0.8455	$3.80
2029	$4.89	9.0%	0.7775	$3.80
2030	$5.34	9.0%	0.7149	$3.81
2031	$5.82	9.0%	0.6574	$3.82
Terminal Value	$5.96 DPS	2.5%		$62.71

PV of Projected Dividends$19.02

PV of Terminal Value$62.71

Fair Value per Share$81.73

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	7.0%	8.0%	9.0%	10.0%	11.0%
6.8%	$111	$116	$121	$127	$132
7.8%	$90	$94	$98	$102	$106
8.8%	$75	$78	$82	$85	$89
9.8%	$65	$67	$70	$73	$76
10.8%	$57	$59	$61	$64	$67

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Best Buy Co., Inc. (BBY) Valuation Summary

Updated May 9, 2026 07:46

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$86.56 – $475.12	$145.08	+144.2%
Growth Exit 10Y	$81.64 – $395.53	$129.82	+118.5%
EBITDA Exit 5Y	$106.77 – $211.88	$154.96	+160.9%
EBITDA Exit 10Y	$93.82 – $191.44	$135.54	+128.2%
▸ Trading Multiples
P/E	$104.58 – $161.38	$127.33	+114.4%
EV/EBITDA	$134.03 – $191.71	$137.98	+132.3%
EV/Revenue	$276.06 – $416.05	$389.17	+555.2%
▸ PEG
PEG Fair Value	$128.54 – $128.54	$128.54	+116.4%
▸ Earnings Power Value
Earnings Power Value	$72.07 – $119.38	$90.49	+52.3%
▸ Dividend Discount
Dividend Discount	$56.59 – $132.08	$81.73	+37.6%

Valuation History

DCF Analysis

Fair Value

$145.08

Market Price

$59.40

Upside / Downside

+144.2%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	2,039
(−) Net Interest	40	41	41	42	43	44
(+) D&A	774	771	732	722	732	750
EBITDA	2,683	2,707	2,702	2,720	2,764	2,833

(−) Tax	432	438	446	452	460	472
(−) CapEx	722	733	746	756	769	788
(−) ΔWC	-588	14	17	14	17	17
Free Cash Flow (FCFF)	2,116	1,523	1,493	1,497	1,518	1,556

Terminal Value						36,313
WACC / Discount Rate	6.8%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	26,153

Enterprise Value	33,167
Projection Period	7,014	21.1%
Terminal Value	26,153	78.9%

(−) Current Net Debt	2,395

Equity Value	30,772
(/) Outstanding Shares	212

Fair Price	$145.08

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.8%	$200	$232	$277	$349	$475
5.8%	$152	$169	$191	$221	$265
6.8%	$122	$132	$145	$161	$183
7.8%	$101	$108	$117	$126	$139
8.8%	$87	$91	$97	$104	$112

Current price: $59.40. Green = undervalued, Red = overvalued.

Fair Value

$129.82

Market Price

$59.40

Upside / Downside

+118.5%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	1,912	1,864	1,843	1,847	1,877	1,924
(−) Net Interest	40	41	41	42	43	41	40	39	40	40	41
(+) D&A	774	771	732	722	732	745	749	746	740	731	749
EBITDA	2,683	2,707	2,702	2,720	2,764	2,698	2,652	2,628	2,626	2,649	2,715

(−) Tax	432	438	446	452	460	442	431	426	427	434	445
(−) CapEx	722	733	746	756	769	739	721	712	714	726	744
(−) ΔWC	-588	14	17	14	17	-39	-24	-11	2	15	15
Free Cash Flow (FCFF)	2,116	1,523	1,493	1,497	1,518	1,555	1,525	1,500	1,483	1,473	1,510

Terminal Value											35,245
WACC / Discount Rate	6.8%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	1,084	995	917	849	790	18,281

Enterprise Value	29,929
Projection Period	11,649	38.9%
Terminal Value	18,281	61.1%

(−) Current Net Debt	2,395

Equity Value	27,534
(/) Outstanding Shares	212

Fair Price	$129.82

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.8%	$184	$209	$244	$298	$396
5.8%	$141	$153	$169	$192	$223
6.8%	$114	$121	$130	$141	$156
7.8%	$95	$100	$105	$112	$120
8.8%	$82	$85	$88	$93	$98

Current price: $59.40. Green = undervalued, Red = overvalued.

Fair Value

$154.91

Market Price

$59.40

Upside / Downside

+160.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.8x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $154.96 per share, suggesting BBY is undervalued by 160.9% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

EV/EBITDA Exit Multiple

13.84x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	2,039
(−) Net Interest	40	41	41	42	43	44
(+) D&A	774	771	732	722	732	750
EBITDA	2,683	2,707	2,702	2,720	2,764	2,833

(−) Tax	432	438	446	452	460	—
(−) CapEx	722	733	746	756	769	—
(−) ΔWC	-588	14	17	14	17	—
Free Cash Flow (FCF)	2,116	1,523	1,493	1,497	1,518	—

Peers' EBITDA Multiple						13.8x
Terminal Value						39,209
WACC / Discount Rate	6.79%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	28,238

Enterprise Value	35,252
Projection Period	7,014	19.9%
Terminal Value	28,238	80.1%

(−) Current Net Debt	2,395
Equity Value	32,857
(÷) Outstanding Shares	212M
Fair Price	$155	+160.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.8x	11.8x	13.8x	15.8x	17.8x
4.8%	$127	$148	$170	$191	$212
5.8%	$122	$142	$162	$182	$202
6.8%	$116	$136	$155	$174	$193
7.8%	$111	$130	$148	$167	$185
8.8%	$107	$124	$142	$159	$177

Current price: $59.40. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$135.51

Market Price

$59.40

Upside / Downside

+128.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Best Buy Co., Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 0.1% to 1.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 9, DPO 56, DIO 55). At a 6.8% WACC with mid-year discounting, the terminal value (63% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.8x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $135.54 per share, suggesting BBY is undervalued by 128.2% at the current price of $59.40.

FCFF Present Value Calculation

WACC

6.79%

3% – 20%

EV/EBITDA Exit Multiple

13.84x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2027	2028	2029	2030	2031	2032	2033	2034	2035	2036	Terminal
Profit Before Tax	1,868	1,895	1,928	1,956	1,989	1,912	1,864	1,843	1,847	1,877	1,924
(−) Net Interest	40	41	41	42	43	41	40	39	40	40	41
(+) D&A	774	771	732	722	732	745	749	746	740	731	749
EBITDA	2,683	2,707	2,702	2,720	2,764	2,698	2,652	2,628	2,626	2,649	2,715

(−) Tax	432	438	446	452	460	442	431	426	427	434	—
(−) CapEx	722	733	746	756	769	739	721	712	714	726	—
(−) ΔWC	-588	14	17	14	17	-39	-24	-11	2	15	—
Free Cash Flow (FCF)	2,116	1,523	1,493	1,497	1,518	1,555	1,525	1,500	1,483	1,473	—

Peers' EBITDA Multiple											13.8x
Terminal Value											37,572
WACC / Discount Rate	6.79%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	2,047	1,380	1,267	1,190	1,130	1,084	995	917	849	790	19,488

Enterprise Value	31,136
Projection Period	11,649	37.4%
Terminal Value	19,488	62.6%

(−) Current Net Debt	2,395
Equity Value	28,741
(÷) Outstanding Shares	212M
Fair Price	$136	+128.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.8x	11.8x	13.8x	15.8x	17.8x
4.8%	$127	$143	$159	$175	$191
5.8%	$118	$132	$147	$161	$176
6.8%	$109	$122	$136	$149	$162
7.8%	$101	$113	$125	$137	$149
8.8%	$94	$105	$116	$127	$138

Current price: $59.40. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$127.33

Market Price

$59.40

Upside / Downside

+114.4%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $127.33 based on 8 comparable companies in the Specialty Retail industry.

P/E Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Best Buy Co., Inc.BBY	12,599	11.8x	9.2x
Casey's General Stores, Inc.CASY	31,859	58.7x	47.5x
Williams-Sonoma, Inc.WSM	21,830	20.7x	21.7x
Packaging Corporation of AmericaPKG	19,933	26.0x	22.5x
Burlington Stores, Inc.BURL	19,132	32.0x	31.1x
DICK'S Sporting Goods, Inc.DKS	18,773	22.6x	15.8x
Amcor plcAMCR	18,449	25.0x	11.0x
Yum China Holdings, Inc.YUMC	16,896	19.2x	20.8x
Lululemon Athletica Inc.LULU	15,389	9.9x	10.1x
Industry Median		23.8x	21.2x
(*) Profit after tax		1,069	1,375
Equity Value		25,445	28,569
(/) Outstanding shares		212	212
Fair Price		$120	$135

Selected Fair Value (avg of trailing + forward)

$127.33

+114.4%

Fair Value

$137.98

Market Price

$59.40

Upside / Downside

+132.3%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $137.98 based on 9 comparable companies in the Specialty Retail industry.

EV/EBITDA Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Best Buy Co., Inc.BBY	12,599	6.6x	6.6x
Casey's General Stores, Inc.CASY	31,859	28.7x	26.6x
Williams-Sonoma, Inc.WSM	21,830	13.5x	13.9x
Packaging Corporation of AmericaPKG	19,933	13.5x	13.4x
Burlington Stores, Inc.BURL	19,132	18.9x	19.0x
DICK'S Sporting Goods, Inc.DKS	18,773	13.8x	10.7x
Amcor plcAMCR	18,449	18.5x	18.4x
Yum China Holdings, Inc.YUMC	16,896	10.3x	10.7x
Lululemon Athletica Inc.LULU	15,389	5.6x	5.7x
Genuine Parts CompanyGPC	14,569	29.7x	29.7x
Industry Median		13.8x	13.9x
(*) EBITDA		2,282	2,285
= Enterprise Value		31,594	31,729
(-) Net Debt		2,395	2,395
Equity Value		29,199	29,334
(/) Outstanding shares		212	212
Fair Price		$138	$138

Selected Fair Value (avg of trailing + forward)

$137.98

+132.3%

Fair Value

$389.17

Market Price

$59.40

Upside / Downside

+555.2%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Best Buy Co., Inc. (BBY) has a fair value of $389.17 based on 9 comparable companies in the Specialty Retail industry.

EV/Revenue Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Best Buy Co., Inc.BBY	12,599	0.4x	0.4x
Casey's General Stores, Inc.CASY	31,859	2.2x	2.0x
Williams-Sonoma, Inc.WSM	21,830	2.9x	2.9x
Packaging Corporation of AmericaPKG	19,933	2.6x	2.6x
Burlington Stores, Inc.BURL	19,132	2.1x	2.1x
DICK'S Sporting Goods, Inc.DKS	18,773	1.5x	1.1x
Amcor plcAMCR	18,449	2.2x	2.2x
Yum China Holdings, Inc.YUMC	16,896	1.6x	1.7x
Lululemon Athletica Inc.LULU	15,389	1.4x	1.4x
Genuine Parts CompanyGPC	14,569	0.9x	0.9x
Industry Median		2.1x	2.0x
(*) Revenue		41,691	41,749
= Enterprise Value		86,162	83,716
(-) Net Debt		2,395	2,395
Equity Value		83,767	81,321
(/) Outstanding shares		212	212
Fair Price		$395	$383

Selected Fair Value (avg of trailing + forward)

$389.17

+555.2%

PEG Fair Value

Fair Value

$128.54

Market Price

$59.40

Upside / Downside

+116.4%

Verdict

Undervalued

PEG Ratio

0.46Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 9.2 ÷ (13.4% + 6.4%) = 0.46

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	13.4%
Dividend Yield	+6.4%
Adjusted Growth (clamped 8–25%)	19.8%
Fair P/E	19.8x
NTM EPS (FY2027)	$6.48
Fair Value	$128.54

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2026 (actual)	$5.04	—	—
FY2027E	$6.48	+28.6%	17
FY2028E	$7.00	+8.0%	17
FY2029E	$7.67	+9.5%	9
FY2030E	$8.69	+13.3%	4
FY2031E	$9.45	+8.7%	3

5Y Forward EPS CAGR: 13.4%

Historical Growth

Year	Net Income	EPS	YoY
FY2022	$2.5B	$9.84	—
FY2023	$1.4B	$6.29	-36.1%
FY2024	$1.2B	$5.68	-9.7%
FY2025	$927.0M	$4.28	-24.6%
FY2026	$1.1B	$5.04	+17.8%

4Y Historical EPS CAGR: -15.4%

Earnings Power Value

Fair Value

$90.49

Market Price

$59.40

Upside / Downside

+52.3%

Verdict

Undervalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,465	1,465	1,465
(/) WACC	8.3%	6.8%	5.3%
Enterprise Value	17,680	21,589	27,716
(-) Net debt	2,395	2,395	2,395
Equity Value	15,285	19,194	25,321
(/) Outstanding shares	212	212	212
Fair Price	$72.07	$90.49	$119.38

Dividend Discount Model

Fair Value

$81.73

Market Price

$59.40

Upside / Downside

+37.6%

Verdict

Undervalued

Dividend Profile

Current DPS

$3.78

Dividend Yield

6.44%

Payout Ratio

74.9%

Dividend Coverage

1.33x

FCF Payout Ratio63.7%

DPS CAGR (4Y)8.2%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2026	$3.78	74.9%	+1.4%
2025	$3.73	87.1%	+1.6%
2024	$3.67	64.5%	+4.9%
2023	$3.50	55.6%	+26.7%
2022	$2.76	28.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2027	$4.12	9.0%	0.9195	$3.79
2028	$4.49	9.0%	0.8455	$3.80
2029	$4.89	9.0%	0.7775	$3.80
2030	$5.34	9.0%	0.7149	$3.81
2031	$5.82	9.0%	0.6574	$3.82
Terminal Value	$5.96 DPS	2.5%		$62.71

PV of Projected Dividends$19.02

PV of Terminal Value$62.71

Fair Value per Share$81.73

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	7.0%	8.0%	9.0%	10.0%	11.0%
6.8%	$111	$116	$121	$127	$132
7.8%	$90	$94	$98	$102	$106
8.8%	$75	$78	$82	$85	$89
9.8%	$65	$67	$70	$73	$76
10.8%	$57	$59	$61	$64	$67