Wayfair Price Target Raised to $50 by Bernstein Amid Positive Market Trends

Analyst Nikhil Devnani from Bernstein has raised Wayfair's (W) price target to $50, up from $35, while maintaining a Market Perform rating. Bernstein expects gains from an extended Way Day and potential preemptive buying effects despite tariffs having little impact in Q1. The average target price for Wayfair is $47.08, implying a 14.99% downside from the current price of $55.38.

Analyst Nikhil Devnani from Bernstein has revised Wayfair Inc's (W) price target upward to $50, an increase from the previous $35, while maintaining a Market Perform rating on the stock [1]. The firm cited a boost in the category during the second quarter as a positive indicator for Wayfair's prospects. Despite the company's management opting not to provide specific guidance, Bernstein anticipates gains from an extended Way Day compared to the previous year and potential preemptive buying effects, despite tariffs having little impact in the first quarter [1].

The average target price for Wayfair, as forecasted by 30 analysts, is $47.08, with a high estimate of $100.00 and a low estimate of $25.00. This average target implies a downside of 14.99% from the current price of $55.38 [1]. The consensus recommendation from 36 brokerage firms is currently 2.4, indicating an "Outperform" status [1]. GuruFocus estimates the GF Value for Wayfair in one year to be $43.29, suggesting a downside of 21.83% from the current price [1].

Wayfair's recent quarterly report showed net revenue was flat year-over-year, with a 10.9% decline in the international segment offset by a 1.6% growth in the US business. Gross margin was 30.7% of net revenue, influenced by non-operational tailwinds and investments in customer experience. Adjusted EBITDA was $106 million, representing a 3.9% margin on net revenue. Cash and equivalents stood at $1.4 billion, with total liquidity at $1.8 billion. Free cash flow was negative $139 million, an improvement of almost $60 million compared to the first quarter of 2024. Capital expenditures were $43 million, lower than guided due to timing and reduced headcount. SG&A expenses were $366 million, down by roughly $50 million compared to the first quarter of last year [1].

Wayfair's strong points include a positive year-over-year growth of 1% in the US market, outperforming the category, a diverse supplier base with manufacturing capabilities in over 100 countries, and successful supplier advertising revenue growth. The company has also taken strategic steps to strengthen its financial position, including the closure of its German business and refinancing its credit facilities. However, the exit from the German market led to a 10.9% decline in the international segment, impacting overall revenue. Additionally, Wayfair faced a negative free cash flow of $139 million in Q1, although it was an improvement from the previous year. The company is navigating a challenging macroeconomic environment with uncertainties around tariffs and consumer demand, and there is a risk of potential inventory shortages if tariffs remain, which could impact the availability of products [1].

References:
[1] https://www.gurufocus.com/news/2983340/wayfair-w-price-target-lifted-by-bernstein-amid-positive-market-trends-w-stock-news
[2] https://www.tradingview.com/news/tradingview:29e5af3fc4cda:0-wayfair-officer-jon-blotner-sells-shares-under-trading-plan/
[3] https://www.investing.com/news/analyst-ratings/citizens-jmp-reiterates-market-perform-rating-on-simulations-plus-stock-93CH-4135031