Williams-Sonoma's (WSM) risk-reward profile has become more balanced following the company's fiscal 2025 guidance, which took into account margin pressure from potential tariffs, UBS said in a Wednesday note.
The analysts described the company's guidance as "realistic," and said it should help "rebase expectations."
Citing some potential concerns, the analysts said the retailer may still need to actively focus on its profit-and-loss to return to sustainable sales growth. Broad-based tariffs could also hit demand and the company's margins, they said.
UBS also said that for investors looking to capitalize on a potential rebound in the home furnishings space there could be other stocks with higher earnings recovery potential.
UBS upgraded the company's stock to neutral from sell and raised the price target to $165 from $140.
Shares were 0.6% lower in recent premarket activity.
Price: 165.30, Change: -0.97, Percent Change: -0.58
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