11:17 AM EDT, 05/29/2026 (MT Newswires) -- Best Buy's ( BBY ) sharp rally following stronger-than-expected fiscal first-quarter results leaves the shares more evenly balanced in the near term, UBS Securities said in a report.

The electronics retailer on Thursday reported adjusted earnings of $1.28 a share in the three months ended May 2, up from $1.15 a year earlier, while revenue rose to $8.94 billion from $8.77 billion. Both topped Wall Street's estimates. The stock jumped 16% after the results and added 2.9% on Friday.

UBS said it still expects Best Buy ( BBY ) to deliver outsized earnings growth of more than 7% and sees momentum continuing into May, helped by broad-based category gains and demand for newer products such as collectibles, wearables and AI glasses. Much of that optimism is now reflected in the stock, the report said.

Best Buy ( BBY ) reaffirmed its fiscal 2027 outlook and appears to have left some cushion in its near-term guidance, UBS said. Even so, lapping last year's Nintendo Switch launch and uncertainty around new TV demand may keep the shares trading in a range, the report said.

Best Buy ( BBY ) continues to show "it's a formidable specialty retailer that adapts well" to shifts in the consumer-electronics landscape, UBS said, adding that the CEO transition looming in November may contribute to a stop-and-start trading pattern.

UBS downgraded its rating on Best Buy ( BBY ) to neutral from buy and increased its price target to $86 from $85. The shares have climbed 15% this year.

Price: 76.88, Change: +2.14, Percent Change: +2.86