These are top 10 stocks traded on the Robinhood UK platform in July
Tuesday, Wells Fargo (NYSE:WFC) analysts downgraded Signet Jewelers stock, traded on the New York Stock Exchange under the ticker (NYSE:SIG), from Overweight to Equal Weight, adjusting the price target to $70 from the previous $80. Currently trading at $54.64, the stock has declined 44.76% over the past six months. The revision reflects concerns about the company's vulnerability to economic downturns and its struggle to generate positive comparable store sales over the past few years. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.
The downgrade was prompted by Signet's highly discretionary nature and its sensitivity to economic shifts, reflected in its high beta of 1.63. Analysts at Wells Fargo noted that the company is currently facing a structural challenge within its industry, namely the impact of lab-grown diamonds and the deflation caused by these alternatives' increasing availability. Despite these challenges, InvestingPro data shows the company has maintained dividend payments for 15 consecutive years, demonstrating financial resilience.
Additionally, there is speculation that Signet may be considering a strategic shift away from its traditional focus on bridal jewelry towards fashion-oriented offerings. This potential change comes as the company tries to navigate a complex market environment.
The analysts elaborated on the downgrade, citing several factors at play that make it difficult to predict the company's performance in the current economic climate. The lowered price target of $70 represents a cautious stance on the stock, down from the previous target of $80.
In summary, Wells Fargo's revision of Signet Jewelers' stock rating and price target is based on a combination of the company's difficulty in maintaining growth in comparable store sales, the challenges posed by lab-grown diamonds, and potential strategic shifts within the company's focus in a challenging macroeconomic context.
In other recent news, Signet Jewelers reported its fourth-quarter earnings for 2025, revealing a slight miss on both earnings per share (EPS) and revenue forecasts. The EPS was $6.62, just below the forecast of $6.67, while revenue reached $2.35 billion, slightly under the expected $2.36 billion. UBS has raised its price target for Signet Jewelers to $89, maintaining a Buy rating, citing the company's strategic initiatives and potential for earnings growth. Meanwhile, Citi has reaffirmed its Buy rating with an $87 price target, highlighting a positive turnaround in sales following a lackluster holiday season. Telsey Advisory Group increased its price target for Signet to $62, noting better-than-expected sales performance and improved expense management in the fourth quarter. Despite the earnings miss, Signet's strategic focus on enhancing omnichannel capabilities and expanding its product offerings appears to be gaining traction. The company's efforts to revitalize its business and improve consumer engagement are seen as promising by analysts. These developments suggest a cautiously optimistic outlook for Signet Jewelers as it continues to navigate a challenging retail environment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.