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Don’t Believe The Hype: Best Buy/Amazon Holiday Price Wars Overstated

From According to analysts at Wedbush Securities this morning, the expected holiday price warns between Best Buy and Amazon didn’t really happen.

Best Buy Co Inc (NYSE:BBY) “Last Man Standing”

With most of its brick-and-mortar retail competitors gone, Best Buy was able to attract plenty of shoppers this holiday season without relying too heavily on discounts, according the Wedbush. The firm expects BBY’s holiday comparable sales (“comps”) to be flat from last year, despite less promotional efforts. Comparable sales are considered a key indicator of a retailer’s health, since they measure the performance of stores open at least one year.

Prices for must-have items also bounced back after Black Friday, marking another indication that there weren’t any price wars going on.

BBY, which was unchanged in premarket trading Tuesday, currently has a POWR Rating of B (Buy), and is ranked #7 of 37 in the Specialty Retailers category., Inc. (NASDAQ:AMZN) Less Promotional, Too

Wedbush believes Amazon likely did a great job managing margins this holiday season as well, relying less heavily on promotions. This trend could help the company offset the expected massive uptick in content spend, as it looks to bolster its Prime Video offerings with more in-house and licensed content.

The firm also noted that AMZN shares have held up well, with the $700 price level looking like strong support. Thus, they see a safe entry point at current levels in the mid-$700s, with little downside risk and significant potential upside if the company is able to beat earnings estimates and provide double digit revenue growth projections (Wedbush thinks both of these are likely to happen).

AMZN, which wa up slightly in premarket trading Tuesday, currently has a POWR Rating of B (Buy), and is ranked #12 of 44 stocks in the Internet category.

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