Williams-Sonoma (WSM) is poised to continue its strong overall performance, as evidenced by its Q2 results, UBS Securities said.
In a home furnishings market that was largely flat for the quarter, the company's growth should be considered as a gain in market share, as its investments in newness, product innovation, digital capabilities, collaborations, and customer experience drive sustained demand, UBS said in a Wednesday note.
The analysts believe Williams-Sonoma has additional runway as it improves assortments, enhances its digital customer experience, and expands partnerships. The company also increased the high and low ends of its H2 guidance ranges, without factoring in any benefits from tariff refunds, which gives a clearer picture of underlying operating performance.
However, the analysts said they remain balanced on the company's stock due to the recent rally. As the stock is trading at about 24 times next-twelve-months earnings, investors will likely look for several more quarters of consistent execution, the analysts said.
UBS reiterated the company's stock rating at neutral and raised the price target to $247 from $190.
Shares of Williams-Sonoma were up 3.1% in Thursday trading.
Price: 244.82, Change: +7.39, Percent Change: +3.11
