Williams-Sonoma, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Williams-Sonoma, Inc. (NYSE:WSM) released its quarterly result to the market. The early response was not positive, with shares down 4.0% to US$228 in the past week. It looks like a credible result overall - although revenues of US$2.0b were what the analysts expected, Williams-Sonoma surprised by delivering a (statutory) profit of US$2.84 per share, an impressive 38% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the 20 analysts covering Williams-Sonoma are now predicting revenues of US$8.27b in 2027. If met, this would reflect a satisfactory 3.3% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$9.85, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$8.18b and earnings per share (EPS) of US$9.40 in 2027. So the consensus seems to have become somewhat more optimistic on Williams-Sonoma's earnings potential following these results.

Check out our latest analysis for Williams-Sonoma

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.2% to US$248. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Williams-Sonoma at US$280 per share, while the most bearish prices it at US$151. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Williams-Sonoma's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.8% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 1.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.0% annually. So it looks like Williams-Sonoma is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Williams-Sonoma's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Williams-Sonoma going out to 2029, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.