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Analysts Raise Price Targets after William-Sonoma’s Q1 Earnings

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Analysts’ recommendations

After William-Sonoma (WSM) reported better-than-expected first-quarter earnings and its management raised its EPS guidance for 2019, many analysts have raised their price targets.

  • Morgan Stanley from $49 to $52
  • UBS from $58 to $60
  • Citigroup from $58 to $59
  • RBC from $60 to $61
  • Jefferies from $58 to $60

However, Telsey Advisory Group has lowered its price target from $62 to $60 after WSM’s first-quarter earnings. As of May 31, analysts were favoring a “hold” rating for WSM. 79.2% of the total 24 analysts covering the stock have given it a “hold,” while 4.2% are recommending “buy” ratings, and 16.7% are advocating a “sell” rating. On average, analysts’ 12-month price target for WSM stands at $57.80, which implies a potential fall of 1.2% from its stock price of $58.50.

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Peer comparisons

Of the total 21 analysts that are covering Bed Bath & Beyond (BBBY), 9.5% are favoring a “buy” rating, while 76.2% are favoring a “hold,” and 14.3% are suggesting a “sell” recommendation. Analysts have given BBBY a 12-month price target of $17.86, which implies an upside potential of 40.7% from its stock price of $12.69.

Of the 21 analysts that cover RH (RH), 38.1% have given it a “buy” rating, while 52.4% are recommending a “hold,” and 9.5% are recommending “sells.” On average, analysts have a 12-month price target of $134.33 on RH, which implies an upside potential of 57.8% from its stock price of $85.15.

Analysts’ expectation

For 2019, analysts are expecting WSM to post revenue of $5.76 billion, which represents a rise of 1.7% from $5.67 billion in 2018. The revenue growth is expected to be driven by overall positive comparable brand revenue, partially offset by a decline in store count. The company’s management expects its 2019 revenue to be in the range of $5.67 billion–$5.84 billion and its overall comparable brand revenue to rise in the range of 2%–5%. The management also plans to close 30 stores this year to bring its total store count to 595 by the end of 2019.

Analysts are also projecting WSM’s EPS to rise by 4.4% in 2019 to $4.66 from $4.46 in 2018.

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