On Wednesday, Piper Sandler expressed a positive outlook for several companies in the Hardlines & Broadlines sector, highlighting potential sales growth in the first half of 2025. The firm anticipates consumers will accelerate their purchases of big-ticket household durables to avoid anticipated price increases due to tariffs. This expected shift in buying patterns could significantly affect sales results for certain companies.
Tempur-Sealy (NYSE:TPX) received an "Overweight" rating with a price target (PT) of $65, as Piper Sandler's channel checks suggest a stronger Q4 than initially forecasted. Despite TPX's Q3 report on November 7, 2024, indicating a downward adjustment in full-year sales and EPS, recent data indicates Q4 industry sales could be as strong as flat year-over-year (y/y), which would mark the best quarter since Q4 2021. The current Q4 consensus sales estimates predict a growth of +0.6%.
Wayfair (NYSE:NYSE:W) also holds an "Overweight" rating, with a PT of $58. Following the election, channel checks with Wayfair suppliers and furniture retailers have indicated a notable improvement in sales trends.
Consequently, Piper Sandler has increased its Q4 sales estimate to 0% y/y, surpassing the consensus of -2%. Furthermore, early 2025 supplier feedback suggests sustained sales momentum, defying typical seasonal patterns. A more comprehensive assessment is expected from the Las Vegas Market event later in January.
YETI (NYSE:YETI) maintains an "Overweight" rating with a PT of $54. Analysts believe that YETI's consensus sales estimates for 2025, which forecast a +6.7% growth, appear attainable, especially following a strong 2024 performance that included a +10% y/y growth.
This growth was partly driven by acquisitions, and upcoming product launches related to these acquisitions are expected to bolster organic growth in 2025. YETI has also restructured its product teams, which is anticipated to sustain a high level of new product introductions.
Other companies likely to benefit from the anticipated shift in consumer purchasing behavior include Best Buy (NYSE:NYSE:BBY), Lowe's (NYSE:NYSE:LOW), Home Depot (NYSE:NYSE:HD), Walmart (NYSE:NYSE:WMT), Target (NYSE:NYSE:TGT), Arhaus (NASDAQ:ARHS), and Byondis (NASDAQ:BYON), according to Piper Sandler.
Notably, InvestingPro data shows Walmart has demonstrated remarkable strength with a 74% return over the past year and maintains a 29-year streak of dividend increases. The retail giant's financial health score is rated as "GOOD," though current valuations suggest the stock may be trading above its Fair Value.
For deeper insights into Walmart's market position and growth potential, investors can access the comprehensive Pro Research Report, which provides detailed analysis of this prominent player in the Consumer Staples sector, along with 13 additional ProTips available on InvestingPro.
In other recent news, Walmart Inc. and its fintech partner, Branch Messenger Inc., are facing a lawsuit from the Consumer Financial Protection Bureau for allegedly opening costly bank accounts for delivery drivers without their consent.
Meanwhile, KeyBanc Capital Markets has spotlighted Walmart as a top stock pick for 2025, citing its strong market position and consistent dividend payments. TD Cowen also reported that FedEx (NYSE:FDX), in partnership with Walmart, is well-positioned to enhance profitability through cost savings.
In other developments, Tigress Financial Partners raised the 12-month price target for Walmart to $115, maintaining a buy rating due to the company's robust growth trajectory and market share gains. Bernstein, a division of SocGen Group, has maintained an Outperform rating on Walmart, expressing confidence in the company's potential to capitalize on its scale and enhance value for customers, particularly in the e-commerce sector.
These recent developments reflect the positive outlook for Walmart, with financial institutions recognizing its potential for growth and profitability. Analysts from these firms have pointed to strategic moves, such as Walmart's acquisition of consumer electronics company VIZIO, as key factors in their positive prognostications.
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