Two days ahead of Williams-Sonoma, Inc. WSM earnings, Barclays maintained its Underweight rating on the company's shares. The brokerage also maintained its price tag of $45.
Analyst Mathew McClintock believes that there existed a downside risk as far as Williams-Sonoma comps and revenue were concerned. For the second quarter, the analyst expects the company to achieve revenue of $1.16 billion with 3 percent comp growth. The company has provided an outlook of $1.15 -0 $1.18 billion for the same period.
"Sinking Shipping has been a substantial uptick in free shipping activity across WSM brands, which could boost sluggish product sales trends. Census data indicate the Furniture & Home Furnishings industry was up 2.7% y/y for May-July, marking the worst quarterly performance since 4Q13 and a substantial sequential deceleration from 6.6% in 1Q16. We believe there is an industry shift to the value channel," the analyst told clients in a note.
The brokerage is bearish on shares pointing out the risk in valuation. The analysts thinks the current valuation multiple could de-rate if the investors opted to question the structural challenges.
The stock traded up by $0.35, or 0.67 percent, to $52.93.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.