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Best Buy becomes a best buy says S&P upgrade

Last updated: 16:09 26 Jul 2016 EDT, First published: 11:09 26 Jul 2016 EDT

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Amazon has offered stiff competition to Best Buy

Best Buy Co Inc (NYSE:BBY), the electronics retailer, has been upgraded to investment grade from junk by ratings agency Standard & Poor’s on Tuesday.

S&P lifted the rating just one notch to triple-B minus, the bottom level of the investment grade status, and assigned the company a ‘stable’ outlook – meaning not at risk of future downgrade.

Best Buy management has battled to generate sales as the shift to online shopping at competitors like Amazon has intensified.

Revenues in its most recent quarter fell 1.3%. The company has focused on cutting costs and shifting its merchandise to reinvigorate business.

S&P said it expected same-store sales to remain flat to “mildly positive” and for cash flow to be “healthy”.

Best Buy shares closed up 2.2% at $33.19 on Tuesday.

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