Loop Capital upgraded Wayfair (NYSE:W) from Sell to Hold and set a price target of $50.00, down from the previous $60.00. This move resulted in a share price gain of more than 2% intra-day today.
The analysts adjusted margin expectations for 2024 and raised the forecast for long-term interest expenses. As a result, the 2024 adjusted EBITDA estimate is now 14% below the Street estimate.
Despite this, the stock’s -16% month-to-date performance indicates these changes might already be reflected in the stock’s pricing. The analysts’ primary concern has been that Wayfair’s growth is primarily fueled by debt, the cost of which has surged. The sales trend for home goods has been declining post the COVID-induced spike. While the future growth trajectory for home furnishings remains uncertain, analysts believe the current stock price offers a balanced risk-reward scenario.