Williams-Sonoma Higher as Profit Prompts Target-Price Rises

Williams-Sonoma shares rose as the home-products retailer beat earnings estimates and analysts increased their price targets.
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Williams-Sonoma  (WSM) - Get Report shares rose as the home-products retailer beat earnings estimates and analysts increased their price targets. 

For the fiscal 2021 third quarter ended Nov. 1, Williams-Sonoma reported profit of $201.8 million, or $2.54 a share, more than twice the $74.7 million, or 94 cents a share, of the year-earlier period.

The FactSet analyst consensus called for earnings of $1.56 in the latest period.

Revenue leaped 22% to $1.77 billion from $1.44 billion a year earlier, topping the FactSet analyst consensus of $1.59 billion.

The company benefited from massive purchases during the pandemic, as consumers stuck at home sought the company's offerings.

Williams-Sonoma recently traded at $108.90, up 7.8%. The shares have surged 48% year to date.

Telsey lifted its target to $130 from $120, with an outperform rating. The San Francisco company's results were “impressive,” and sales would have come in “even stronger” if not for inventory constraints, the investment firm said, according to Bloomberg.

The fiscal fourth quarter, too, should be “robust,” Telsey said, given management’s forecast for sustained strong demand.

Baird boosted its price target to $120 from $105 with a neutral rating. “Demand accelerated and flow-through was robust,” it said according to Bloomberg. Baird “materially” increased its earnings estimates.

RBC pushed its price target to $117 from $101 with a sector-perform rating. Earnings flow-through was “material,” it said, according to Bloomberg. But sales and margin comparisons will be “highly challenging by mid-2021.”

Jefferies raised its price target to $104 from $90 with a hold rating. 

Third-quarter earnings included “record customer acquisition, encouraging retention, success in dialing back promotions, and business-to-business traction,” it said. But an 11% decline in inventories versus a 22% gain in sales is a negative.