Wedbush downgrades Williams-Sonoma with on deteriorating trends

Wedbush downgraded Williams-Sonoma (WSM) to Neutral from Outperform with a price target of $135, down from $150. The firm cites limited margin drivers and a “weak” sales outlook for the downgrade. While Williams-Sonoma “seemingly de-risked” its outlook when it reduced fiscal 2024 guidance in conjunction with the Q2 results, trends have deteriorated in recent months despite easier comparisons, the analyst tells investors in a research note. Wedbush has become “more concerned” that the company’s market share gains could prove more difficult in the coming quarters, the industry’s recovery is being pushed out, and its margin expansion opportunities are more limited. In addition, potential additional tariffs are a risk, it says.