FILE - In this Thursday Nov 22, 2012 file photo, people wait in line for a Best Buy store to open in Northeast Philadelphia. Best Buy Co. says its fourth-quarter loss narrowed as it cut costs to offset nearly flat sales during the key holiday quarter. The financial results beat expectations and shares rose more than 6 percent in premarket trading. (AP Photo/Joseph Kaczmarek, File)

Ahead of the Bell: Best Buy

Published: 12:59:32 PM, Tue 05 March 2013 UTC

NEW YORK (AP) — An analyst raised Best Buy's price target on Tuesday, saying she's encouraged about the company's future for the first time in almost three years.

Kate McShane of Citi Investment Research said in a client note that the electronics chain posted better-than-expected fourth-quarter results as it remained competitive on price and worked toward converting window-shopping customers into buyers.

On Friday, Best Buy Co. reported that U.S. revenue in stores open at least 14 months rose 0.9 percent, the best performance in 11 quarters, CEO Hubert Joly pointed out in an interview with the AP. Its adjusted earnings and revenue topped Wall Street's expectations.

Best Buy has been working to turn around its results as it faces tough competition from online retailers and discounters. The Minneapolis company has cut jobs, invested in training employees and started matching online prices. Results show that the changes are beginning to help.

McShane said that Best Buy is showing signs of improvement, but she kept a "Neutral" rating because she wants to make sure that the company has come up with a formula that will produce sustainable improvement.

McShane increased the chain's price target to $19 from $13.

Best Buy shares finished at $17.77 on Monday. Its shares have recovered from a 52-week low of $11.20 in late December. They traded as high as $27.95 last March.

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