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Why Williams-Sonoma (WSM) Dipped More Than Broader Market Today

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In the latest close session, Williams-Sonoma (WSM - Free Report) was down 1.35% at $187.50. This change lagged the S&P 500's daily loss of 0.63%. Meanwhile, the Dow experienced a drop of 0.65%, and the technology-dominated Nasdaq saw a decrease of 0.47%.

Prior to today's trading, shares of the seller of cookware and home furnishings had lost 3.33% was narrower than the Retail-Wholesale sector's loss of 4.1% and lagged the S&P 500's gain of 0.92%.

The investment community will be closely monitoring the performance of Williams-Sonoma in its forthcoming earnings report. The company is expected to report EPS of $1.85, down 5.61% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $1.85 billion, reflecting a 2.51% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.54 per share and revenue of $7.82 billion. These totals would mark changes of -2.84% and +1.38%, respectively, from last year.

Any recent changes to analyst estimates for Williams-Sonoma should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.33% lower. Williams-Sonoma is currently a Zacks Rank #3 (Hold).

With respect to valuation, Williams-Sonoma is currently being traded at a Forward P/E ratio of 22.25. For comparison, its industry has an average Forward P/E of 22.25, which means Williams-Sonoma is trading at no noticeable deviation to the group.

It is also worth noting that WSM currently has a PEG ratio of 3.07. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Retail - Home Furnishings industry had an average PEG ratio of 2.64.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 177, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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