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Strength Seen in Williams-Sonoma (WSM): Can Its 18.5% Jump Turn into More Strength?

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Williams-Sonoma, Inc. WSM shares soared 18.5% in the last trading session to close at $161.57. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.7% gain over the past four weeks.

Shares of Williams-Sonoma have surged after the company posted solid fourth quarter of fiscal results. The company reported solid comps. Moreover, positive investor sentiments were witnessed as the company provided solid long term guidance. Notably, the company expects demand for kitchen and houseware products to continue.

Price and Consensus

Price Consensus Chart for Williams-Sonoma
Price Consensus Chart for Williams-Sonoma

This seller of cookware and home furnishings is expected to post quarterly earnings of $1.08 per share in its upcoming report, which represents a year-over-year change of +46%. Revenues are expected to be $1.37 billion, up 10.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Williams-Sonoma, the consensus EPS estimate for the quarter has been revised 3.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on WSM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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