12:53 PM EST, 03/07/2024 (MT Newswires) -- Williams-Sonoma ( WSM ) is expected to benefit from "modest top-line growth" and multiple margin tailwinds, making it Wedbush's top pick in home furnishings retail, analysts said in a note Thursday.

Wedbush maintains a positive outlook on the company ahead of its Q4 earnings results scheduled for Wednesday. "Although home furnishings demand weakened to finish end the fiscal year, we continue to believe that the industry is poised for improvement and should grow in 2H24," Wedbush said.

External indicators suggest that Williams-Sonoma ( WSM ) is successfully curbing market share losses, positioning itself to align more closely with industry performance in 2024. Wedbush expects the company to achieve over $1 EPS growth, outperforming consensus for $0.15 EPS growth with a 16% operating margin in 2024, the note said.

"We expect some of this upside to be apparent with [Williams-Sonoma ( WSM )]'s forthcoming 2024 guidance that could include 16% to 17% operating margins," Wedbush said, adding it would not be surprised if the company raises its long-term operating margin floor beyond the current 15% target, considering its recovery from double-digit sales declines and supply chain-driven margin challenges, it added.

Wedbush raised its price target to $280 from $230 and maintained Williams-Sonoma's ( WSM ) rating at outperform.

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