Best Buy (BBY) is expected to report in-line Q4 results and issue a "balanced" fiscal 2026 outlook, as the company will likely "err on the conservative side," UBS said Thursday in a note.

The Q4 results will likely show the impact of a "solid holiday" followed by a moderate softening in sales trends in recent weeks, the investment firm said.

UBS analysts said that even though they believe the retailer's top-line can grow in 2025, the company "likely hasn't been immune to the wide array of distractions consumers have faced recently."

Further tariffs on goods from key sourcing regions for the electronics industry, which could push retail prices higher, could provide additional risk to category demand, the analysts said.

A conservative guidance, however, positions the company for potential upside if sales trends improve over the next few quarters, and it "probably means the market will be more focused on BBY's margin defensibility" in the current fiscal year, the firm said. It also believes the company remains committed to its cost-saving measures.

Best Buy is due to report Q4 results on March 4.

UBS has a buy rating on the stock and $115 price target.

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