Blair upgrades Williams-Sonoma as shares hit highs


NEW YORK -- Williams-Sonoma's potential for international expansion could position the company for solid sales growth in the near and long term, William Blair as it raised its rating on the upscale home goods company.

The upgrade comes as shares in the San Francisco company hit an all-time Wednesday.

After an investor meeting with management, analyst Daniel Hofkin expects strong trends to continue at at Pottery Barn and West Elm, as well as margin improvements at Williams-Sonoma as it moves toward a more high-end product.

The company suggested a goal of revenue at least doubling over the next 10 years, Hofkin said, with earnings-per-share growing even faster. Yet Hofkin believes those targets may be conservative, pointing to a housing industry on the mend and the potential for international expansion.

William-Sonoma's $4 billion in revenue represents just 4 percent of the U.S. home furnishings market, Hofkin pointed out. The company estimates the global furnishings market at $530 billion.

Hofkin raised his rating to "outperform" from "market perform." He raised his earnings per share price target to 2 cents to $2.57 and his 2013 estimate by 5 cents to $2.85.

Shares of Williams-Sonoma Inc. were flat in premarket trading Thursday. Shares reached an all-time high of 46.38 Wednesday.