Warby Parker downgraded to Sell from Neutral at Citi

Citi analyst Paul Lejuez downgraded Warby Parker (WRBY) to Sell from Neutral with a price target of $23, up from $19. The firm expects a strong Q4 report, but says the stock has risen 50% over the past three months to a level it believes is overvalued. The business has performed better than planned in fiscal 2024, with improvement in some metrics, like the increase in active customers, which should expect to continue into fiscal 2025, the analyst tells investors in a research note. However, Citi has concerns that Warby’s store sales volumes are lower than originally planned, and that its sales growth has significantly lagged store growth since 2021, as customers per store have declined since 2022. While these have been concerns for some time, when combined with a “rich valuation,” the stock’s risk/reward is unfavorable, Citi contends.