Best Buy's (BBY) Q2 growth is expected to remain modest, as higher store traffic from the Nintendo Switch 2 launch was offset by weaker average transaction values, BofA Securities said in a note Wednesday.

BofA estimates Q2 earnings per share of $1.23 with Wall Street expecting $1.20 and enterprise comparable sales down 0.3%, roughly in line with consensus. Analysts surveyed by FactSet expect $1.20

Best Buy will report fiscal Q2 results on Aug. 28.

The company's gross margin is projected to remain flat at 23.5%, as it laps a Geek Squad benefit from last year, while SG&A expenses are anticipated to increase due to one-time savings rolling off and increased medical claims, BofA said.

Though the company is expected to see continued pressure in appliances and consumer electronics, analysts note that the retailer's newly launched marketplace, should expand assortment and add incremental profit streams, boosting operating margins, the report added.

The firm maintained it underperform rating on the stock, with a price target of $63.

Shares of the company were down 2.7% in recent Wednesday trading.

Price: 72.28, Change: -1.82, Percent Change: -2.46