Deutsche downgrades Wayfair to Hold on tariff regime

Deutsche Bank downgraded Wayfair (W) to Hold from Buy with a price target of $25, down from $54. Wayfair’s business model is “by far the most upended by the new tariff regime” in the internet group, as evidenced by the shares declining 42% since earnings, the analyst tells investors in a research note. The firm says there is “no sugarcoating the potential re-ordering of the global furniture supply chain and the associated incremental costs that are likely to accrue to Wayfair.” While current tariff rates are likely to come down over time, the combination of tariff costs and industry declines steepening in 2025, portend “substantial earnings revisions ahead” for Wayfair, contends Deutsche Bank. As such, the firm believes the stock’s risk/reward is balanced at current levels.