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On Friday, Jefferies analyst Jonathan Matuszewski upgraded Wayfair stock from Hold to Buy, increasing the price target to $47 from $45. This adjustment reflects a renewed confidence in the company’s potential for EBITDA growth, which the analyst believes could outpace the general market consensus. According to InvestingPro data, Wayfair’s stock is currently trading near its 52-week low of $32.50, with analyst targets ranging from $43 to $100.
Matuszewski points to several factors that have bolstered his outlook on the online furniture retailer. Among these are Wayfair’s significant market share gains, the introduction of a new paid loyalty program, notable traction in the B2B sector, and an underappreciated expansion into physical retail spaces. These elements contribute to the analyst’s positive stance on the company’s future financial performance. The company currently generates $11.85 billion in annual revenue, though InvestingPro analysis indicates a weak overall financial health score, suggesting room for improvement in operational efficiency.
The analyst also noted that Wayfair is currently trading at a discount compared to its peers, despite projections showing its EBITDA compound annual growth rate (CAGR) could be nearly three times higher than its competitors through 2027. He highlighted the current stock price of $33, which is on par with the level seen 24 hours after COVID-19 was declared a global pandemic. Despite this, Matuszewski emphasized that the business has grown by 30% in size, with EBITDA margins nearly 1,000 basis points higher. InvestingPro analysis suggests the stock is currently undervalued, with additional indicators pointing to oversold conditions. Subscribers can access 10 more exclusive ProTips and comprehensive financial metrics in the Pro Research Report.
The Jefferies analyst concluded his remarks by suggesting that there is approximately a 40% upside to the current trading price, offering a positive outlook for investors considering Wayfair shares. This perspective is based on the company’s performance and potential growth trajectory in the coming years, with analysts forecasting a return to profitability this fiscal year.
In other recent news, Wayfair Inc (NYSE:W). reported its fourth-quarter 2024 earnings, revealing a notable miss on earnings per share (EPS) at -$0.25, compared to the expected -$0.01, while revenue slightly exceeded expectations at $3.12 billion. RBC Capital Markets adjusted its outlook on Wayfair by reducing the price target from $50.00 to $43.00, maintaining a Sector Perform rating due to uncertainties in sales growth and Wayfair’s exit from the German market. Meanwhile, BMO Capital Markets increased Wayfair’s price target to $55.00, citing strong fourth-quarter performance and positive prospects from AI technology investments, though they expressed caution about the consumer spending environment.
BofA Securities also revised its price target for Wayfair, lowering it to $50.00 while maintaining a Neutral rating, highlighting challenges such as increased marketing expenses and industry pressures. Bernstein analysts maintained a Market Perform rating with a $45.00 target, pointing out concerns over rising customer acquisition costs and potential tariff impacts, despite Wayfair’s commitment to EBITDA growth. These recent developments reflect various analyst perspectives on Wayfair’s strategic initiatives and financial outlook amidst a challenging market environment.
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