Wayfair Stock Upgraded on Recovery Potential

A short squeeze could come into play for W

Digital Content Manager
Apr 4, 2024 at 10:51 AM
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Evercore ISI upgraded Wayfair Inc (NYSE:W) stock to "outperform" from "in line" and lifted its price objective to $80 from $65 this morning. The brokerage firm highlighted the e-commerce name's potential to steal market share as the home furnishing business recovers. At last check, W is 3.9% higher at $64.83.

The $72 level has acted as a ceiling for the equity since September, more recently rejecting its late March rally. Meanwhile, the 20-day moving average has guided shares higher. Now on track to snap a three-day losing streak, Wayfair stock is up more than 88% in the last 12 months. 

There is still plenty of room for analysts to hop on the bullish bandwagon, with 13 of the 30 in coverage still sporting a tepid "hold" rating. A short squeeze could also come into play, as 24.9% of the equity's available float is currently sold short. It would take these bears over a week to cover their bets, at W's average pace of trading.

The options pits are far more bullish. This is per the stock's 10-day call/put volume ratio of 2.97 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 98% of annual readings.

Now is the time to bet on the stock's next moves with options, since premium players are currently pricing in low volatility expectations. In fact, the security's Schaeffer's Volatility Index (SVI) rating of 61% ranks higher than only 10% of readings from the past year.

 

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