Home-furnishings retailer Wayfair recently received an upgrade from UBS analysts, who anticipate a bright future for the company. The analysts upgraded Wayfair’s stock to Buy from Neutral and increased their price target to $110 from $72. They also raised their estimates for earnings per share, revenue, and earnings before interest, taxes, depreciation, and amortization through fiscal 2025.
According to the analysts, Wayfair is poised to enter a multi-quarter period of sales and profit acceleration. Despite the upgrade, Wayfair’s stock has seen little change, rising only 0.8% to $83.74 in Monday trading. However, throughout the year, the stock has more than doubled.
The UBS analysts believe that Wayfair will experience further revenue growth in the coming periods thanks to sharper pricing and improved availability. They noted that these decisions have already proven beneficial, with the company’s customer base growing in the latest quarter after several quarters of decline. Additionally, net revenue per active customer in the 12 months ended June 30 increased slightly compared to the previous year.
The stabilization of Wayfair’s customer base has given the UBS analysts confidence in the company’s sustainable growth trajectory. They expect increased spending per customer to drive market-share gains.
Wayfair is scheduled to hold an analyst day event on Thursday, which the UBS analysts believe will serve as a positive catalyst for the company. Analysts from Bank of America (BofA) also expect the event to cover topics such as market-share growth sustainability, gross-margin targets, and investment discipline through next year. BofA rates Wayfair stock at Buy with a price objective of $105.
Last week, Wayfair received a flurry of price-target raises from Wall Street firms. Currently, 49% of analysts rate the stock as Buy, 46% as Neutral, and 5% as Sell, according to FactSet.
In conclusion, Wayfair has received an upgrade from UBS analysts who foresee sales and profit acceleration for the company. The analysts expect Wayfair to experience revenue growth in the coming periods and believe that the company’s customer base is stable and poised for increased spending. Wayfair’s upcoming analyst day event is anticipated to have a positive impact on the company, and analysts are mostly bullish on its stock.
