On September 12, the majority of the analysts remained on the sidelines for Wayfair (W) stock. Of the 26 analysts covering Wayfair, 54.0% recommended a “hold.” Another 42.0% recommended a “buy,” and the remaining rated the stock as a “sell.”
There have been no changes to these analysts’ price targets in the last 30 days. Currently, the analysts’ 12-month average target price for Wayfair stock is $124.29, which reflects a 16.9% downside to its stock price on September 12.
Why are the analysts on the sidelines?
Wayfair’s costs are escalating mainly due to higher investment activities. The costs are unlikely to abate in the near term as the company remains in the investment phase.
Nonetheless, the prospects for Wayfair look bright as consumers migrate to online shopping. More importantly, Millennials are relying heavily on online shopping. With the use of augmented reality apps, online furniture buying is expected to become the norm.
The company is working on improving its product assortment and improving its customer services to garner a larger share of the $600.0 billion addressable market for home goods.
What are analysts saying about Wayfair’s peers?
About 77.0% of the 35 analysts covering Home Depot (HD) rated it as a “buy” while 23% rated it as a “hold.” The analysts’ 12-month average target price for HD stock is $215.13, which reflects a 1.5% upside to the stock on September 12.
For RH (RH), 38.0% of the 21 analysts rated it as a “buy” while 57.0% rated it as a “hold.” The analysts’ 12-month average target price for RH stock is $157.29, which reflects a 20.2% upside to the stock.
Of the 26 analysts covering Williams-Sonoma (WSM) stock, just 4.0% rated it as a “buy.” About 81.0% of the analysts rated it as a “hold,” and another 15.0% rated it as a “sell.” The 12-month average target price for WSM stock is $62.05, which reflects a 10.9% downside.