Morgan Stanley downgrades Williams-Sonoma, says stock could fall another 18% as demand for home furnishings weakens

Expect more downside ahead for Williams-Sonoma's stock as demand for home furnishings weakens in a difficult macro environment, according to Morgan Stanley.

Expect more downside ahead for Williams-Sonoma 's stock as demand for home furnishings weakens in a difficult macro environment, according to Morgan Stanley. Analyst Simeon Gutman downgraded the stock to underweight from equal weight, saying in a note to clients Monday. The analyst also slashed his price target on the stock to $100 from $150. The new target implies downside of roughly 18% from Friday's close.

Earlier this month, Williams-Sonoma reported third-quarter sales and profit that surpassed analyst expectations. However, the company failed to reiterate or update its outlook for the 2024 fiscal year, citing economic uncertainties ahead. Going forward, Gutman views a slew of macro-related issues for Williams-Sonoma, expecting home furnishings to decline by 6% to 7%, discretionary spending to fall and deflation to return in 2023. Williams-Sonoma shares have fallen more than 27% in 2022.

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