Piper Sandler maintains $30 target on Warby Parker stock

Published 21/02/2025, 14:04
Piper Sandler maintains $30 target on Warby Parker stock

On Friday, Piper Sandler reaffirmed its positive stance on Warby Parker Inc. (NYSE:WRBY), keeping an Overweight rating and a $30.00 price target on the company’s shares. The firm’s analysts highlighted the shift in Warby Parker’s strategy towards opening new stores in existing markets as a bullish sign for the company. This approach is anticipated to contribute positively to the company’s margins. According to InvestingPro data, the company currently appears overvalued compared to its Fair Value, though it maintains strong financial health with a current ratio of 2.47, indicating solid liquidity.

Warby Parker, which is set to report its fourth-quarter 2024 earnings on February 27, has shown commendable performance throughout 2024, with its stock price performing well into 2025. InvestingPro data reveals an impressive 80.7% return over the past year, with shares seeing a year-to-date increase of 4.5%, outperforming the broader market. The stock is currently trading at $25.30, near its 52-week high of $28.68. For deeper insights into Warby Parker’s valuation and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports.

Analysts at Piper Sandler have expressed optimism about Warby Parker’s upcoming earnings report, suggesting that there could be an upside to the fourth-quarter results. They believe that the potential for an eyewear replacement cycle, along with company-specific initiatives aimed at enhancing services such as eye exams and insurance, could drive growth for Warby Parker. InvestingPro analysis shows that four analysts have revised their earnings upward for the upcoming period, with the company expected to achieve profitability this year despite not being profitable over the last twelve months.

The company had initially set a sales growth target of 12-13% for 2024 but is on track to potentially exceed that with a 15% growth rate or higher. For 2025, analysts consider the consensus sales growth forecast of 13% to be a reasonable starting point.

Furthermore, Warby Parker’s accelerated store expansion plan for 2025 is set to include at least 40 new stores, matching the number of openings in each of the past three years. The strategic decision to focus more on existing markets for these new openings is expected to provide a 30-40 basis points tailwind to the company’s annual margins, according to Piper Sandler’s analysis. This move solidifies Warby Parker’s position as a top small cap growth pick for the firm.

In other recent news, Warby Parker Inc. has been the focus of multiple analyst reports, highlighting various perspectives on its financial outlook. BTIG increased its price target for Warby Parker to $30, maintaining a Buy rating, based on anticipated momentum and potential market share growth. This adjustment comes as the company prepares to release its fourth-quarter earnings report, with expectations set above consensus estimates. Meanwhile, Citi downgraded Warby Parker from Neutral to Sell, despite raising the price target to $23, citing concerns over valuation and sales dynamics. Evercore ISI also downgraded the stock to In Line, setting a price target of $23, while acknowledging the company’s strong management and market representation.

Loop Capital raised its price target for Warby Parker to $27, following improved demand trends as indicated by their proprietary eye exam availability tracker. The firm maintained a Hold rating, noting the stock’s previous strong performance and current valuation. Additionally, Baird maintained an Outperform rating and increased the price target to $30, emphasizing Warby Parker’s growth potential within the U.S. eyewear market and its strategic initiatives. These recent developments reflect a range of analyst opinions on Warby Parker’s market position and future prospects. Investors are likely to pay close attention to the company’s upcoming financial results to gauge the accuracy of these projections.

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