Shares of online furniture retailer Wayfair Inc (NYSE:W) fell nearly 5% on Wednesday after Jefferies downgraded the stock to “Hold,” citing weakening web traffic, softer early holiday demand and fading buying intent among consumers.
Jefferies said it had turned more cautious after reviewing third-party traffic and survey data that pointed to a slower start to the peak shopping season.
“With web traffic revealing a slow start to the official kick-off for holiday shopping and consumer survey data signaling a downshift in go-forward buying propensity on the marketplace, risk/reward skews more balanced, in our view,” the analysts wrote.
The brokerage cut its price target to $94 from $101.41, implying a downside of about 7%, and said Wayfair’s valuation premium of nearly 40% versus peers had become harder to justify given more modest projected profit growth.
Jefferies highlighted a “clear deceleration” in Wayfair’s November website visits, with US traffic down roughly 300 basis points from October and Black Friday weekend visits down about 12% from a year earlier. The firm said buying propensity among surveyed consumers had slipped into negative territory in November after eight consecutive monthly increases.
Analysts also warned that middle-income shoppers — a core Wayfair demographic — may pare back discretionary purchases as labor market pressures weigh on sentiment, even as higher-income households continue to spend.
Jefferies trimmed its fourth-quarter revenue and margin estimates and now expects Wayfair’s 2026 EBITDA to rise at a low double-digit pace, below consensus forecasts for mid-teens growth.