Oppenheimer Upgrades Williams-Sonoma, Says Housing Backdrop Still Improving

In a report published Friday, Oppenheimer analyst Brian Nagel upgraded the rating on

from Perform to Outperform with a price target of $90. Home Retail appears well positioned within the Hardlines sector for the current economic environment. Analyst Brian Nagel expressed optimism regarding a "more complete and powerful upswing in residential real estate" helping to propel a further acceleration in home-related sales at leading chains. Nagel believes that the recent upward momentum in home sales and household formation indicate "the potential for further improvements in demand for home-related goods." However, margins at leading Home Accessory chains could be under pressure due to more aggressive price promotions. The Oppenheimer report named Williams-Sonoma as one of the top near-term picks, while also naming

and

. While the longer-term prospects for

and

are bright, there appear to be no significant near-term positive catalysts for these shares. "WSM has represented a "wish list" stock for us for a while. We view the chain as particularly well positioned to capitalize upon potentially improving demand trends within the Home Retail category. The WSM omni-channel model is a strong differentiator and profit driver and increasingly the model for most other chains," Nagel wrote. Williams-Sonoma's sales and EPS could be boosted in the near term by abating West Coast port issues.