JPMorgan double upgrades Wayfair and says it’s time to buy the dilapidated furniture stock
JPMorgan said Wayfair stock is cheap right now and it’s time to buy it. Analyst Christopher Horvers double-upgraded the stock from underweight to overweight), citing improving market share trends and a better view of management’s spending. Horvers also raised the price target to $63 from $35. Its new target reflects a 34.6% gain over Friday’s close. “We upgrade Wayfair from underweight to overweight on a positive shift in market share trends and management’s newfound commitment to spending/investment control, which together should result in a significant turn in earnings revisions from strongly negative to positive over the past two years the top of what is still attractive valuation,” he said in a note to clients Monday. The stock is up more than 7% premarket. The stock received a boost last week after Wayfair unveiled a cost-cutting plan that includes a 10% job cut However, the analyst still sees significant upside potential after the jump.Wayfair is up 42.3% so far in 2023, accounting for part of the 82.7% drop in 2022. He said Wayfair is staying because of its leading product range relevant to home retailing, even if the market changes its position d judge more sinisterly. Wayfair should also feel a tailwind from year-over-year improvements in availability and delivery speeds. Additionally, he said, the company benefited from being able to avoid a promotional environment that traditional retailers have had to rely on in recent months as they attempt to move large amounts of inventory. According to Horvers, improving sales performance and management’s “newfound cost discipline” should combine to help earnings revisions stand out positively from the sharp downward move of the past two years. The company has already reported improving sales trends in the fourth quarter, he added. Horvers said it was finally a good time to buy Wayfair after the stock burned up its “excess” share value from Covid. (The price is about 80% below where it started 2021 and 43% below pre-Covid prices, he noted.) He added that the stock is trading at the low end of the enterprise value-to-sales multiple. – CNBC’s Michael Bloom contributed to this report.
https://www.cnbc.com/2023/01/23/jpmorgan-double-upgrades-wayfair-says-its-time-to-buy-the-beaten-down-furniture-stock.html JPMorgan double upgrades Wayfair and says it’s time to buy the dilapidated furniture stock
