Williams-Sonoma, Inc. (NYSE:WSM) shares fell 7.5% to US$67.42 in the week since its latest quarterly results. Williams-Sonoma beat revenue expectations by 2.0%, recording sales of US$1.4b. Earnings per share (EPS) came in at US$0.94, some 5.9% short of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest forecasts to see what analysts are expecting for next year.
Following the latest results, Williams-Sonoma's 23 analysts are now forecasting revenues of US$6.02b in 2021. This would be an okay 2.2% improvement in sales compared to the last 12 months. Earnings per share are expected to swell 11% to US$4.89. In the lead-up to this report, analysts had been modelling revenues of US$5.98b and earnings per share (EPS) of US$4.87 in 2021. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$69.37. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Williams-Sonoma, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$45.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Williams-Sonoma's revenue growth will slow down substantially, with revenues next year expected to grow 2.2%, compared to a historical growth rate of 4.4% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 5.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Williams-Sonoma to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Williams-Sonoma's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Williams-Sonoma going out to 2024, and you can see them free on our platform here.
You can also view our analysis of Williams-Sonoma's balance sheet, and whether we think Williams-Sonoma is carrying too much debt, for free on our platform here.
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