Truist Securities Ramps Up Wayfair’s PT On Improving Profitability

Truist Securities lifted Wayfair’s price target to $315 (1.9% upside potential) from $208 and reiterated a Hold rating on the stock citing the company’s improving profitability. Shares of the online home decor retailer rose 3.7% on Tuesday.

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Truist analyst Naved Khan wrote in a note to clients that Wayfair’s (W) “growth has been accelerated by the tailwinds of the pandemic with faster customer gains and margin improvements driving its solid profitability.” Khan added that the company’s “growing sales volume should add to profitability.” However, khan reaffirmed his Neutral stance given the stock’s “full” valuation.

On Aug. 5, Wayfair reported that 2Q revenues increased 83.7% to $4.31 billion year-on-year, beating the Street consensus of $4.06 billion. Its adjusted EPS of $3.13 surpassed analysts’ forecast of $1.04. During the quarter, the company’s active customers in Direct Retail business soared 46% to 26 million year-over-year. Its gross margin expanded 680 basis points.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 11 Buys, 11 Holds and 4 Sells. Following this year’s 242% rally, the average price target of $306 implies downside potential of 1%. (See W stock analysis on TipRanks).