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On Thursday, UBS analyst Mauricio Serna adjusted the price target for Signet Jewelers (NYSE:SIG), a leading name in the retail jewelry sector, to $89.00, marking an increase from the previous target of $85.00. The firm maintained its positive stance on the company with a Buy rating. Serna highlighted the potential for a 57% upside to the stock, citing a favorable risk/reward balance with a roughly 2.5:1 upside/downside skew. This optimism aligns with InvestingPro analysis, which indicates the stock is currently undervalued, while recent market activity shows a notable 22% gain over the past week.
The analyst’s optimism is rooted in Signet Jewelers’ ongoing efforts to revitalize its business. The company has been focusing on enhancing its omnichannel capabilities, refining its bridal banners, injecting new fashion items, and fortifying its supply chain. These strategic moves are expected to yield sustainable sales growth. InvestingPro data shows the company maintains strong financial health with a ’GOOD’ overall score, supported by a healthy current ratio of 1.48x and robust cash flow generation.
Signet’s encouraging sales trends in the first quarter to date were also noted as evidence of the company’s forward momentum. These trends appear to support the analyst’s projection of a topline inflection point for Signet. UBS forecasts a 9% compound annual growth rate (CAGR) in earnings per share (EPS) over a five-year period. The analyst believes that the market has yet to fully recognize Signet’s growth prospects, especially given its current valuation at 6.3 times the forecasted earnings for the next fiscal year.
The expectation of earnings surpassing estimates in the near term (NTM) is anticipated to be a catalyst for the stock, driving it towards the newly set $89 price target. This adjustment reflects confidence in Signet Jewelers’ trajectory as it continues to execute its business transformation initiatives.
In other recent news, Signet Jewelers reported its fourth-quarter 2025 earnings, revealing a slight miss on earnings per share and revenue forecasts. The company posted an EPS of $6.62, just below the forecast of $6.67, and revenue of $2.35 billion, slightly under the expected $2.36 billion. Despite this, the company’s stock surged, possibly due to strong strategic initiatives and product expansions. Meanwhile, Telsey Advisory Group raised its price target for Signet shares to $62 from $55, citing better-than-expected sales performance and improved expense management, while maintaining a Market Perform rating. Citi also reaffirmed a Buy rating with an $87 price target, noting a positive sales trajectory and confidence in Signet’s strategic shift. Signet’s comparable store sales turned positive in January, trending at the higher end of the company’s first-quarter guidance with a +2% comp. Analysts noted the company’s strategic focus on fashion and self-purchase consumers, aiming to expand its target market and decrease dependence on bridal sales. Signet’s fiscal year 2025 outlook projects total sales between $6.53 billion and $6.80 billion, with same-store sales expected to range from down 2.5% to up 1.5%.
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