UPDATE - UBS Initiates Coverage on Williams-Sonoma (WSM) with a Neutral; Looking for Value
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Price: $237.58 +0.80%
Rating Summary:
16 Buy, 27 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
Rating Summary:
16 Buy, 27 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
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UPDATE - UBS initiates coverage on Williams-Sonoma (NYSE: WSM) with a Neutral rating. PT $38.
UBS analyst says, "On paper, WSM has as good an investment story as any hardline retailer, but we believe this is captured in its premium valuation. The positives on the company range from its astute marketing competency to its vast international growth opportunity. However, that is balanced by a potential valuation contraction concurrent with decelerating sales trends and merchandising margin pressure due to the sharp increase in sourcing costs."
"We think the stock is reaching fair value. We expect the company’s results will continue to more closely hug expectations moving forward, which will put pressure on the P/E multiple. On the other hand, WSM has $4.50 in net cash per share and should generate another $2 per share over the next few qtrs. This will protect the downside for WSM, in our view. Our $38 price target is based on a blend of a DCF and multiple analysis (16x our CY’12E EPS of $2.40)."
UBS analyst says, "On paper, WSM has as good an investment story as any hardline retailer, but we believe this is captured in its premium valuation. The positives on the company range from its astute marketing competency to its vast international growth opportunity. However, that is balanced by a potential valuation contraction concurrent with decelerating sales trends and merchandising margin pressure due to the sharp increase in sourcing costs."
"We think the stock is reaching fair value. We expect the company’s results will continue to more closely hug expectations moving forward, which will put pressure on the P/E multiple. On the other hand, WSM has $4.50 in net cash per share and should generate another $2 per share over the next few qtrs. This will protect the downside for WSM, in our view. Our $38 price target is based on a blend of a DCF and multiple analysis (16x our CY’12E EPS of $2.40)."
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