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Telsey Upgrades Williams-Sonoma before Its Q1 Earnings

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Today, Telsey Advisory Group upgraded Williams-Sonoma (NYSE:WSM) from “market perform” to “outperform” before its first-quarter earnings. The investment banking firm also doubled its target price from $40 to $80. The new target price represents a 12-month return potential of 20.3% from its closing price of $66.49 on May 22. As reported by CNBC, Telsey’s analysts expect Williams-Sonoma to benefit from the shelter in place order.

Other analysts’ recommendations for Williams-Sonoma

Last week, Wedbush upgraded the stock from “neutral” to “outperform” and raised its target price from $46 to $80. As reported by Seeking Alpha, Seth Basham of Wedbush stated that customers haven’t just shifted towards online shopping. They’re moving their discretionary spending away from travel, entertainment, apparel, and footwear to the home goods category, which could benefit Williams-Sonoma. He said that the company’s online sales growth has more than offset the sales lost due to store closures. In his research, Basham wrote, “With nearly 60% of sales online, a mid-high end customer base and 40%+ of sales in furniture, these trends position WSM very well not just in the near-term, but also in the medium-term as the secular shift to online home goods shopping advances quickly.”

On May 13, RBC increased its target price from $69 to $70. Meanwhile, analysts’ consensus target price was $56.89 on May 22. The target price represents a fall of 14.4% from its current stock price of $66.49. Wall Street favors a “hold” rating for the stock. Among the 23 analysts, 56.5% recommend a “hold,” 26.1% recommend a “buy,” and 17.4% recommend a “sell.”

Stock performance

Today, Williams-Sonoma was trading 2.8% higher at 10:12 AM ET. The company’s stock price rose due to Telsey Advisory Group’s upgrade and the stronger broader equity market. US stock markets rose due to investors’ optimism about reopening the economy and a breakthrough in the COVID-19 vaccine. At the same time, the S&P 500 Index was trading 1.8% higher today.

Amid the global sell-off in March, Williams-Sonoma stock fell to a low of $26.01 on March 18. However, the stock has made a significant recovery since then by rising 155.6%. Despite the recent surge, the company was trading 9.5% lower this year as of May 22. During the same period, RH (NYSE:RH) and Bed Bath & Beyond (NASDAQ:BBBY) have fallen by 7.2% and 61.3%, respectively.

Williams-Sonoma will likely report its first-quarter earnings on May 28. Stay tuned for our earnings preview. Read Why Is Target a ‘Buy’ after Its Q1 Earnings? to learn more.

 

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