Shares of At Home (NYSE:HOME) surged today, finishing up 13.5% after a Wall Street analyst released a bullish research note on home-furnishing retailers. Separately, investors were also encouraged by fresh retail sales data released by the Commerce Department.
Jefferies boosted its price targets on numerous home improvement and home-furnishing companies, including Lowe's, Home Depot, and Wayfair. The firm believes that the broad shift to remote work that COVID-19 is spurring may translate into a large number of people moving from urban cities to suburban areas, boosting homeownership in 2021. Those new homeowners are then expected to start buying more products to furnish those homes, particularly as homeowners tend to spend more on big-ticket purchases like appliances than renters.
While At Home is not mentioned specifically in the research note to investors, the company would clearly benefit from those trends.
The Commerce Department also released monthly data regarding retail sales today, and the report showed that overall retail sales in the U.S. jumped 17.7% as more states move to reopen their economies. More specifically, seasonally adjusted retail sales for furniture and home furnishing stores soared by 90% to $7.7 billion in May, compared to $4.1 billion in sales in April.
Throughout the coronavirus outbreak, e-commerce companies have noted that demand for home furnishings has remained strong as consumers spend more time at home. In its annual report, At Home notes that it does "not currently engage in e-commerce," so it will rely predominantly on the return of retail customers as lockdown restrictions ease.