Bernstein Research Upgrades Wayfair to Outperform With $125 Target

Bernstein Research upgraded Wayfair Inc. from market perform to outperform and increased its price target from $100 to $125, implying a 24% upside. The upgrade follows a period of strong performance for the online furniture retailer, whose shares rose 19% in August after the company reported second-quarter results on August 4 that exceeded expectations.

Wayfair also provided third-quarter revenue growth guidance that surpassed analyst projections. Bernstein Research analyst Nikhil Devnani attributed the company's durable growth to high single-digit revenue growth in the U.S. market, which he noted was driven by premium brands and stronger order volumes.

Devnani stated that increased cost discipline at the company should lead to margin expansion and stronger EBITDA growth. He suggested that a disconnect exists between current consensus numbers and the actual trajectory of the business.