Wayfair (NYSE:W) received a vote of confidence from Morgan Stanley on Tuesday, as the investment bank raised its price target to $70.00 from $50.00, maintaining an Overweight rating on the stock. The revision signals approximately 35% upside from Wayfair’s current share price of $51.99.
Positive Momentum and Risk-Reward Upside
The online home furnishing retailer has returned 15.4% over the past six months, with Morgan Stanley citing an “asymmetric risk/reward profile skewed to the upside.”
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Bull case: ~92% upside
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Bear case: ~42% downside
The revised target price is based on 0.85x Morgan Stanley’s 2026 sales estimate of $12.1 billion, a 15% discount to Wayfair’s historical EV/Sales average of 1.0x.
Valuation Anchored in Market Realities
Wayfair currently reports:
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Revenue: $11.85 billion
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Gross Margin: 30.31%
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Current Ratio: 0.83 (indicating moderate liquidity stress)
The discount to valuation reflects continued uncertainty in U.S. housing turnover, which directly impacts furniture demand. That said, Morgan Stanley noted improving trade policy and macro conditions that support a modestly more optimistic outlook.
Monitor Revenue and Margin Trends
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Bottom Line
With macro conditions stabilizing and consumer confidence improving, Wayfair is emerging as a recovery play in the home furnishing space. While liquidity pressures remain, the stock’s risk/reward skew and upside valuation make it a compelling watch in the second half of 2025.
