01:52 PM EDT, 08/15/2024 (MT Newswires) -- Best Buy ( BBY ) is set to report in-line to slightly better than expected fiscal Q2 earnings per share as sales trends improved a bit from fiscal Q1, UBS said in a note.

Analysts, including Michael Lasser, said in a Wednesday note that despite a slight slowdown in sales later in the quarter, they believe Best Buy ( BBY ) is set for a stronger performance in 2025.

UBS said the industry demand seems to be improving due to factors like a replacement cycle, new product innovations, and increased housing turnover, adding that these factors could contribute to sales growth and the company poised to see an upside to its earnings with recent cost structure improvements.

"We will be looking for signs that Best Buy ( BBY ) continues to evolve how it motivates and retains its associates. It has long eschewed the industry norm of using a commission-based compensation model. Still, it will need to ensure that it is providing customers with the superior experience that has long differentiated Best Buy ( BBY ). This could require some additional investment, but we think it can do this and still enhance shareholder value during a recovery," the analysts said.

Best Buy ( BBY ) could potentially achieve better-than-expected earnings next year, which could boost its stock price, the analysts said, adding they forecast EPS of $7.30 for 2025 and $8.01 for 2026.

UBS maintained a price target of $106 on Best Buy ( BBY ), with a buy rating.

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