Wayfair stock is up 25% on Monday: what happened?

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on Jan 23, 2023
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  • JPMorgan analyst double upgraded Wayfair Inc to "overweight" on Monday.
  • He's bullish on increasing market share and discipline on the spending front.
  • Wayfair stock has already doubled versus its price in early November 2022.

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Shares of Wayfair Inc (NYSE: W) shot up as much as 25% on Monday after a JPMorgan analyst turned super bullish on the online store for furniture and other home-related products.  

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Wayfair stock wins a double upgrade

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Christopher Horvers double upgraded the eCommerce company this morning to “overweight” and sharply raised his price objective to $63 – signalling a close to 40% upside on its previous close.

His constructive view on the Wayfair stock is based on its increasing market share and the recently found religion on spending.

Positive shift in market share trends and newfound commitment to controlling expenses/investments combined should cause a significant inflection in earnings revisions from steeply negative to positive.

Last week, Wayfair revealed plans of lowering its headcount by 10% that it expects will generate roughly $500 million of operational cost savings.

Wayfair stock is still inexpensive to own

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According to the JPMorgan analyst, Wayfair stock is still attractively valued even though it has already doubled since early November.

Horvers noted the improvement that Wayfair has made in terms of availability and delivery speeds over the trailing twelve months as well.

Additionally, over the next 3-5 years, W should outgrow the category given the longer-term shift towards online retailing and its advantages assortment/supply chain as the largest scaled online specialty player in the industry.

He’s bullish also because the home goods retailer did not have to rely on promotions to clear inventory glut this holiday season. Last month, Wayfair said the monthly revenue trends improved further on a year-over-year basis.

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