WSM - Williams-Sonoma downgraded as Wedbush sees 'darkening' macro backdrop

Williams-Sonoma ( NYSE: WSM ) was downgraded at Wedbush as the firm’s analysts see weaker consumer spending and inventory issues hurting the company into 2023.

“Even though we expect a slight beat for 3Q, the darkening macro outlook and heavily over-inventoried industry leads us to sharply reduce forward estimates,” the analysts explained. “While WSM is the “best house on a bad block” and should continue to benefit from brand momentum driving share gains, brand range that should capture sales as consumers trade down, a fast-growing b-to-b business and order backlog deliveries, the company is not immune to an intensifying promotional environment.”

Despite negative investor sentiment and a relatively low bar for the Q3 earnings expected for later in November, the prospects for deterioration into 2023 restrain bullishness on the name. As such, the Wedbush team took its Buy rating to Neutral and slashed their price target on shares to $110 from $190. The team had previously held a Buy-equivalent rating since May 2020.

Shares of the San Francisco-based home furnishings company edged lower by about 1% in premarket trading. The stock has slid about 40% in the past year.

Read more on Jefferies recent move to “Sell” on the stock .

For further details see: