Overstock.com Inc's OSTK has transformed to a greater degree than peers, with accelerating online sales of home furnishings, and the company seems poised to “potentially” sustain full-year retail growth and positive EBTIDA, according to BofA Securities.
The Overstock Analyst: Ryan Gee upgraded Overstock from Neutral to Buy and raised the price target from $88 to $91.
The Overstock Thesis: While there continues to be uncertainty around the shift in buying behavior from offline retail peers to Overstock, the “durability of the company’s mindshare gains is reason to be incrementally constructive,” Gee said in the upgrade note.
The analyst named five reasons for the positive view:
- Overstock “grew faster than overall home furnishings” in 2020 and doubled its new customers, he said.
- Overstock's guidance of “mid-single digits” margins for 2021 came in better than the Street’s 4%, Gee said.
- The new CMO hire from Amazon.com, Inc. AMZN “may enhance branding and mobile offering.”
- Favorable U.S. housing trends are tailwinds to home furnishings, Gee said.
- “Offloading blockchain businesses clarifies the value prop and could accelerate L.T. value creation,” the analyst said.
OSTK Price Action: Shares of Overstock were up 1.22% at $73.82 at last check Thursday.
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