Shares of Wayfair (W) are under pressure on Thursday as Bank of America analyst Curtis Nagle downgraded the stock to Underperform, a Sell-equivalent rating, on weak near-term data, tough comparisons through the first quarter of 2022, and his view of a risk that the company's core mass consumer customer is shifting spending from furnishings back into other categories. Bullish on the name, however, Needham analyst Anna Andreeva initiated coverage of Wayfair with a Buy rating as she believes supply chain headwinds are starting to ease and that the company's CastleGate program utilization will start to scale up next year.

SELL WAYFAIR: Bank of America analyst Curtis Nagle downgraded Wayfair to Underperform from Neutral with a price target of $175, down from $265. The analyst cited weak near-term data, tough comparisons through the first quarter of 2022, and his view of a risk that the company's core mass consumer customer is shifting spend from furnishings back into other categories such as travel and entertainment in 2022. A more cautious view is warranted given a weaker near-to-medium growth outlook and limited positive catalysts for growth, Nagle told investors in a research note.

BUY WAYFAIR: Meanwhile, Needham analyst Anna Andreeva initiated coverage of Wayfair with a Buy rating and $280 price target. Consensus expectations for the company's fiscal 2022 will need to be "reigned in," but its supply chain headwinds are starting to ease already in the current quarter, while its CastleGate program utilization will start to scale up next year, the analyst told investors in a research note. Andreeva added that the valuation on the stock is "muted at best" at 1.6-times enterprise value to expected 2022 sales vs. 1.9- to 2.0- levels that Wayfair shares had seen earlier this year. Further, a move into omnichannel with this month's opening of 3 Wayfair stores could be needle-moving overtime with new customer acquisition and conversion and post-purchase experience, the analyst argued.

WHAT'S NOTABLE: Last month, Argus analyst John Staszak downgraded Wayfair to Hold from Buy. While the company should benefit over time as more consumers purchase home goods online, its revenue growth rate has now declined for two straight quarters and it is unclear when it will resume, the analyst told investors in a research note at the time. Staszak also cut his full year 2021 earnings per share view on Wayfair to $3.30 from $4.50 and full year 2022 view to $4.10 from $6.60 after Wayfair's latest third-quarter results that saw revenue fall 19%.

PRICE ACTION: In Thursday morning trading, shares of Wayfair have dropped over 7% to $191.81.