On Monday, UBS made an adjustment to the price target for Signet Jewelers (NYSE:SIG), listed on the New York Stock Exchange under the ticker NYSE:SIG (LON:SHI). The new target has been set at $134.00, a decrease from the previous $138.00, while the firm continues to recommend a Buy rating for the stock.
The focus for investors regarding Signet's upcoming fourth-quarter earnings report is expected to be on the company's fiscal year 2025 (calendar year 2024) guidance. UBS forecasts that Signet will present an earnings per share (EPS) outlook ranging from $10.25 to $10.80 for FY25. This projection is anticipated to align with market expectations, potentially maintaining the sell-side's consensus EPS estimate of $10.65 for FY25.
The analyst from UBS anticipates that the guidance provided by Signet could stabilize the current sell-side EPS expectations. However, they also caution that a below-consensus guide for first-quarter sales and tepid commentary for the quarter-to-date might exert some negative pressure on investor sentiment and the price-to-earnings (P/E) ratio of Signet's stock.
In terms of market activity surrounding the earnings report, the options market is pricing in a potential price movement of approximately plus or minus 9.7% in response to the earnings event. This is slightly below the historical average movement of plus or minus 9.9%. Despite this, UBS expects the actual volatility in Signet's stock price to be less than the 9.7% indicated by the options market.
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