On Friday, Telsey Advisory Group adjusted its price target for Williams-Sonoma (NYSE:WSM), following the retailer's 2-for-1 stock split earlier this week. The firm's new 12-month price target is now set at $170, down from the previous $340, while the Outperform rating for the company remains unchanged.
The adjustment comes in the wake of the stock split that took place on Tuesday, July 9, 2024. Telsey's updated analysis reflects the stock division, with a corresponding amendment to the earnings per share (EPS) estimates.
The firm's forecast for 2024 EPS is now $8.04, a reduction from the prior $16.05 estimate. Similarly, the 2025 EPS projection has been revised to $8.34, down from the earlier prediction of $16.62.
The revision in the price target and EPS estimates also takes into account the updated average share price for share repurchases. This factor is influenced by the stock's performance since the first quarter of 2024, which in turn affects the calculation of the share count.
Despite the significant alteration in the price target, Telsey has reiterated its positive stance on Williams-Sonoma, suggesting confidence in the company's ongoing performance.
Apart from the changes due to the stock split, Telsey has stated that all other assumptions regarding Williams-Sonoma's business outlook remain consistent with previous analyses. The firm has not introduced any new variables into its forecast model at this time.
In other recent news, Williams-Sonoma, Inc. has announced a two-for-one stock split, in a move aimed at broadening its investor base. The company has also declared a quarterly cash dividend of $1.14 per share, which will adjust to $0.57 per share post-stock split.
In terms of governance, Williams-Sonoma welcomed Andrew Campion, a former Nike Inc (NYSE:NKE). executive, to its Board of Directors. On the analyst front, RBC Capital maintained its 'Outperform' rating on Williams-Sonoma, with TD Cowen echoing a positive outlook by reiterating a 'Buy' rating.
Meanwhile, Barclays maintains an 'Underweight' rating. In terms of financial performance, Williams-Sonoma's first quarter of Fiscal Year 2024 showcased an operating margin of 19.5% and earnings per share of $4.07, prompting an upward revision of its operating margin forecast for the year.
InvestingPro Insights
In light of Telsey Advisory Group's updated price target for Williams-Sonoma, it is pertinent to consider additional insights provided by InvestingPro. Williams-Sonoma has demonstrated a commendable track record, raising its dividend for 18 consecutive years, which is a testament to its financial health and commitment to shareholder value. Moreover, the company has shown a significant return over the last week, with a 9.73% price total return, highlighting a positive short-term investor sentiment.
From a valuation standpoint, Williams-Sonoma is trading at a P/E ratio of 18.56, which may be considered high relative to near-term earnings growth. However, with a strong return on assets of 21.99% over the last twelve months as of Q1 2023, the company's efficiency in generating profits from its assets is evident. Additionally, the company's liquid assets exceed its short-term obligations, indicating a solid liquidity position that can reassure investors about the company's short-term financial stability.
For those looking to delve deeper into Williams-Sonoma's financial metrics and gain further insights, InvestingPro offers additional tips on the company's performance and valuation. With the use of coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, accessing a wealth of knowledge to inform their investment decisions. There are 14 additional InvestingPro Tips available for Williams-Sonoma, which can be explored for a comprehensive understanding of the company's financial landscape.
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