Abhoy Sarkar's Avatar
published in Blogs
May 29, 2020

Williams-Sonoma (WSM,$83.49) gets price target raises on same-store sales beat

Williams-Sonoma  got their price target hikes, following higher-than-expected same-store sales growth amid covid-19 crisis.

The retailer of home furnishings and kitchenware reported same-store sales growth of +2.6% in the first quarter, crushing analysts’ anticipation of a - 11.5% decline. 

Comparable sales in the e-commerce segment increased +31%.

Wedbush analyst Seth Basham affirmed his outperform rating, and boosted his price target to $90 from $80. Basham cited the company’s beating of expectations for first-quarter 2020. He also mentioned that consumers have been shifting their spending online, and also shifting spending to their homes as they reduce travel and entertainment.

RBC Capital analyst Scot Ciccarelli hiked the price target on Williams-Sonoma to $76 from $70, and said that the first-quarter earnings beat was supported by "home-centric purchases," and e-commerce generating an even bigger sales growth than expected. But Ciccarelli  also warned that discretionary big-ticket spending could be at risk for the foreseeable future. 

Tickeron's A.I.-powered scorecard rates Williams-Sonoma as a STRONG BUY.

Current price $83.49 is above $74.73 the highest resistance line found by A.I. Throughout the month of 04/27/20 - 05/28/20, the price experienced a +19% Uptrend. During the week of 05/20/20 - 05/28/20, the stock enjoyed a +10% Uptrend growth.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Moving Average Convergence Divergence (MACD) just turned positive. Considering data from situations where WSM's MACD histogram became positive, in 33 of 54 cases, the price rose further within the following month. The odds of a continued Uptrend are 61%.

The 10-day Moving Average for this ticker crossed above its 50-day Moving Average on April 27, 2020, which can be construed as a buy signal, indicating that the trend is shifting higher. In 10 of 20 similar cases where WSM's 10-day Moving Average crossed above its 50-day Moving Average, the price rose further within the following month. The odds of a continued Uptrend are 50%.

The Aroon Indicator entered an Uptrend today. In 110 of 211 similar cases where WSM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 52%.

Bearish Trend Analysis

The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

The Stochastic Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

The higher Bollinger Band was broken -- a price fall is expected as the ticker heads toward the middle band, which invites the trader to consider selling or shorting the ticker, or exploring put options. In 24 of 34 cases where WSM's price broke its higher Bollinger Band, its price dropped further during the following month. The odds of a continued Downtrend are 71%

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 72%. During the last month, the daily ratio of advancing to declining volumes was 1.48 to 1.

The Tickeron PE Growth Rating for this company is 23 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is 30 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Price Growth Rating for this company is 39 (best 1 - 100 worst), indicating steady price growth. WSM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.56) is normal, around the industry mean (8.85). P/E Ratio (16.25) is within average values for comparable stocks, (47.03). Projected Growth (PEG Ratio) (1.47) is also within normal values, averaging (1.45). Dividend Yield (2.74) settles around the average of (1.30) among similar stocks. P/S Ratio (0.94) is also within normal values, averaging (0.66).

The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Profit vs. Risk Rating rating for this company is 90 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WSM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 86, placing this stock worse than average.

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