Bernstein has upgraded Wayfair from market perform to outperform, raising its price target from $100 to $125, which indicates a potential upside of 24% based on the stock's closing price. This upgrade follows a strong month for Wayfair, with shares rising 19% after the company reported better-than-expected second-quarter results on August 4, leading to a 29% surge in stock price on that day.
Analyst Nikhil Devnani noted that Wayfair is achieving high single-digit revenue growth in a stagnant furniture market, driven by premium brands and increased order volumes. He pointed out a disconnect between consensus estimates and the company's growth trajectory, suggesting that improved cost discipline could lead to stronger EBITDA growth and margin expansion.
Despite the recent gains, Wayfair's stock remains flat for the year, and analysts are divided on the stock, with 20 out of 34 rating it a buy or strong buy. Following the upgrade, Wayfair shares increased by more than 2%