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Thursday - Telsey Advisory Group has increased the price target for Signet Jewelers (NYSE:SIG) shares to $62 from the previous $55, while keeping a Market Perform rating on the stock. The firm’s analyst highlighted Signet’s better-than-expected sales performance and improved expense management, which contributed to fourth-quarter operating income and earnings per share that exceeded forecasts. The stock has shown remarkable momentum, posting a significant 22% return over the past week, according to InvestingPro data, though it remains down nearly 40% over the past six months.
The report comes after Signet faced lowered expectations due to a disappointing holiday sales update and reduced guidance for the fourth quarter in January. The company has since seen a turnaround with the introduction of new CEO J.K. Symancyk in November. Symancyk’s strategy, titled "Grow Brand Love," aims to boost growth in self-purchase and gifting, with a focus on design-led products and continued expansion in the bridal category. This strategy is supported by a reorganization plan that will help fund a reset of incentive compensation, as well as efforts to optimize Signet’s real estate footprint, shifting more towards off-mall locations and e-commerce over the next three years. Despite recent challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.48 and has consistently paid dividends for 15 consecutive years, demonstrating operational resilience.
Looking forward, the outlook for fiscal year 2026 appears to be more promising than initially feared, falling in line with prior consensus forecasts. Signet has also seen positive comparable store sales in January and the quarter to date, including during the crucial Valentine’s Day selling period, which stands in contrast to the conservative expectations set by much of the retail sector for the first quarter.
Despite these positive indicators, Telsey remains cautious due to the uncertain macroeconomic environment and its potential impact on consumer spending in discretionary categories. Other factors contributing to this caution include a slower engagement ring sales recovery cycle, the CEO transition, and the ongoing recovery of digital platforming efforts. As a result, while acknowledging the encouraging current sales trends and more optimistic guidance, Telsey maintains a Market Perform rating on Signet shares. The new price target of $62 implies a multiple of 6.5 times the firm’s two-year forward earnings per share estimate of $9.60, compared to a recent multiple of 5.3 times and a three-year average of 7.1 times.
In other recent news, Signet Jewelers Ltd reported a slight miss in its fourth-quarter 2025 earnings, with earnings per share (EPS) at $6.62, just below the forecast of $6.67. The company’s revenue also fell short of expectations, coming in at $2.35 billion against the anticipated $2.36 billion. Despite these minor misses, the company saw a positive market reaction, with strong strategic initiatives possibly contributing to investor confidence. Additionally, Signet has undertaken reorganization and cost-saving measures to enhance its market position.
The company continues to lead the bridal jewelry segment with a 30% market share, although it faces challenges from a flat to low single-digit growth expectation in the U.S. jewelry market. Analysts have noted the company’s efforts in expanding its lab-grown diamond fashion segment, which has shown significant growth. For the fiscal year 2025, Signet projects total sales between $6.53 billion and $6.80 billion, with an EPS range of $7.31 to $9.10. The company is also focusing on brand differentiation and enhancing its product offerings to drive future growth.
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