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Best Buy: Credit Suisse still 'neutral' after strong quarter

(CercleFinance.com) - On Wednesday Credit Suisse maintained a "neutral" rating on the Best Buy stock, with a target price of 78 dollars, after the US electronics retailer delivered better-than-expected third-quarter profit.

After the share rose by over 2% yesterday, the broker said that it is surprised by this strong move, given the composition of results, as the report should not have been a thesis-changing quarter.

Indeed, Credit Suisse acknowledges that the Minneapolis-based company is executing well, with initiatives on track, which shows that Best Buy's diverse mix will be able to support growth and navigate the ups and downs of product cycles.

However, the broker thinks that there is still some uncertainty around the future economics of its growing service and healthcare business, and notes that the group's gross margin trend has been weaker than expected.

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