Williams-Sonoma Bears Underestimate Ability To 'Maintain Profitability Levels,' Analyst Says

Williams-Sonoma, Inc’s WSM CEO Laura Alber has recently sold around $4 million worth of her shares.

The company's ability to maintain the current profitability levels is already reflected in the share price, according to Loop Capital.

The Williams-Sonoma Analyst: Anthony Chukumba downgraded the rating for Williams-Sonoma from Buy to Hold, while raising the price target from $200 to $220.

The Williams-Sonoma Thesis: The stock has gained around 18% year to date, versus an 8% rise in the S&P 500, Chukumba said in the downgrade note.

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“We continue to believe Williams-Sonoma 'bears' are underestimating the company's ability to maintain current profitability levels for a number of reasons, including the elimination of sitewide promotions, the continued mix shift to e-commerce (and consequent ongoing rationalization of the Williams-Sonoma concept and Pottery Barn store bases), and the company's growing—and completely unlevered to the US housing market—business-to-business (B2B) operation,” the analyst wrote.

“In addition, the company's current valuation is a premium to the historical 10-year average,” he further stated.

WSM Price Action: Shares of Williams-Sonoma had declined by 0.52% to $236.42 at the time of publication on Tuesday.

Photo: Courtesy of Clotee Pridgen Allochuku on flickr.