Wayfair (W) PT Lowered to $175 at Guggenheim
Guggenheim analyst Steven Forbes lowered the price target on Wayfair (NYSE: W) to $175.00 (from $250.00) while maintaining a Buy rating.
The analyst commented, "As previewed, although W's 4Q 2021 operating results were relatively in line with expectations (Exhibit 1)—net sales down low-double digits and a breakeven adjusted EBITDA margin—management's initial 2022 outlook validated our near-term caution around consensus EBITDA margin expectations. In fact, the anticipated pressure from rising compensation costs was worse than we had expected. As a result, although we still expect that return of ~20% revenue growth at some point during 2H 2022 (as evidenced by our 4Q 2022 expectations), we are meaningfully lowering our 2022 adjusted EBITDA estimate—to $22 million from $410 million. With W shares already trading at pre-COVID valuation levels—1.0x EV / NTM sales vs. 2017-2019 average of 1.1x (Exhibit 2)—combined with the fact that our 2022 net sales expectations ($14.4 billion) essentially implies no sustained COVID-related sales lift, we remain BUY rated but lower our price target to $175 (from $250)."