Wayfair ( NYSE: W ) has a new bull on Wall Street as William Blair analyst Phillip Blee resumed coverage of the stock with an “Outperform” rating on Tuesday.
Blee told clients that the company remains in a good position despite its significant drawdown from its 2021 peak and likely offers significant upside from the present share price. He added that while margin pressures remain a key concern, an inflection is expectable as supply chains normalize and advertising expenses are reined in.
“While the consumer environment remains uncertain, we continue to believe that Wayfair maintains a fundamentally strong model and is well positioned to continue to absorb market share and leverage its existing operations over the long term with minimal additional investment in infrastructure required,” he explained.
Still, Blee noted that a slowdown in housing is the key hangup for investors heading into the company’s earnings release on Thursday.
“Given the increasingly uncertain macro environment and broader slowdown in the housing market, we believe there is risk to our sales and earnings expectations in the back half of 2022,” he wrote. “However, we remain encouraged by a recent inflection in demand trends and believe Wayfair is better positioned in this environment than its peers. As such, we are maintaining our current estimates until we have incremental data points coming out of the second-quarter print.”
Blee had previously suspended his price target in July.
Shares of Wayfair ( W ) have fallen over 70% in 2022, finding itself a laggard within the already-slumping eCommerce sector for the year . Still, shares of the Boston-based internet retailer have roared more than 20% higher in the week ahead of its second quarter earnings release.
Read more on the earnings expectations for the company .
For further details see:
Wayfair is a Buy ahead of earnings despite macro concerns - William Blair