While the pandemic caused a shift to working from home and made companies like Zoom Communications (ZM) a household name, other trends played out as well. Spending more time in the home, consumers started spending more on home goods.
That’s a trend that looks likely to continue as the economy recovers and incomes rise. For those on the higher-end of the economic scale who were relatively unaffected, it bodes very well for high-end furnishing companies.
One big player? Williams-Sonoma (WSM). The company recently saw an upgrade thanks to the strong home furnishing trend. Although shares are up over 375 percent from their pandemic lows, there’s still further upside ahead thanks to double-digit revenue and earnings growth of 86 percent in the past year.
Action to take: With shares trading at about 20 times forward earnings, it’s still cheaper than the average S&P 500 stock, and high-end brands tend to fare well during periods of economic expansion. Shares look attractive up to $190. Shares yield 1.3 percent, thanks to a recent double-digit boost in the dividend.
For traders, the upward trend in the chart for the past year shows little signs of slowing down. The November $200 calls, with a bid/ask of about $17.10, are capable of high double-digit growth should shares rally further from here.