What's Next For Williams-Sonoma? Credit Suisse Sees Another Catalyst
In a report published Thursday, Credit Suisse analysts maintained their Neutral rating on Williams-Sonoma, Inc. (NYSE: WSM). The price target was raised from $75 to $80. The company reported strong Q1 results and there are signs of further improvement in Q2.
During Q1, the gross margin declined in-line with expectations, driven for most part by sales losses and supply chain costs. The analysts, however, expect improvement in margins in Q2, a trend that is likely to continue into 2H, with a possibility that margins might even rise.
The various initiatives implemented by the company and resolution of its port issue are expected to drive potential gross margin upside in 2H.
The sales for the quarter came in ahead of expectations, and given the improvements witnessed so far in May, the analysts believe that the Q2 guidance could prove to be conservative.
"We expect the stock to rise on the results, particularly given that it has done little since the company lowered its outlook in March while many other names in our space have re-rated higher," the analysts said.
Latest Ratings for WSM
Apr 2015 | Cantor Fitzgerald | Initiates Coverage on | Hold | |
Mar 2015 | BB&T Capital | Downgrades | Buy | Hold |
Mar 2015 | Deutsche Bank | Maintains | Hold |
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