ISI Group Reiterates Buy, $40 PT on Williams-Sonoma

ISI Group maintains its rating of Buy and price target of $40 on Williams Sonoma

despite gross margin depression stemming from holiday season promotions. ISI Group notes, "The promotional cadence in 4Q that hurt margins remains concerning, but we maintain a buy on the name. Fundamentally, this remains a strong and well-run company that will benefit from continued migration of home goods online. Using a LOW multiple (another hardline company that had some recent gross margin issues and has some debate on 2012) of 14.75x our 2012 WSM estimate of $2.45 we get fair value at $36. Looking at the buybacks and EPS upside, we think this could be a $40 stock." WSM closed at $34.32 per share on Thursday.