On Thursday, UBS maintained a Buy rating on Signet Jewelers (NYSE:SIG) but reduced the price target to $128 from $134. The adjustment followed the company's fiscal year 2025 guidance, which fell short of market expectations, causing Signet's shares to drop 12.1% compared to the S&P 500's gain of 0.9%.
According to UBS, the updated guidance suggests that Signet's revenue recovery will be more gradual than previously anticipated. Despite the slower recovery, the firm believes that Signet's internal initiatives are set to drive significant long-term growth. The fourth quarter report from Signet Jewelers bolstered UBS's confidence in the company's strategic positioning to capture market share and achieve sales growth, particularly as its bridal segment improves.
UBS forecasts a 9% five-year earnings per share (EPS) compound annual growth rate for Signet Jewelers. The firm also expects EPS beats in the near term to act as a catalyst for the stock, moving it toward the newly set $128 price target. The revision reflects a more cautious outlook on the company's immediate revenue prospects while still endorsing its growth potential.
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