Sonos is set to rebound roughly 50% as it returns to growth, Rosenblatt Securities says. Analyst Steve Frankel initiated coverage of the audio company with a buy rating and a $20 price target, saying he’s expecting demand to pick back up for Sonos audio products. “Sonos is a category leader in a market that should return to growth, driven by the ease and appeal of multi-room music along with the continued adoption of soundbars as a hasslefree way to improve the home entertainment experience,” Frankel wrote in a Tuesday note. SONO 1D mountain Sonos shares 1-day Sonos shares have sold off this year, plunging 20% while the S & P 500 has rallied 16% during the same period. Regardless, the analyst’s $20 price target implies shares will surge 54% from Tuesday’s closing price of $12.95. Shares were 3.8% higher during midday trading Wednesday. The analyst expects Sonos to continue to face challenges including tough comparisons up ahead but expects demand to improve as the company focuses on innovating new products. He added the company’s emphasis on software differentiates it from its competitors such as Bose, B & O or JBL. “In the short-run, the company faces headwinds including a tough comp in Q1 but, we see it only a matter of time before demand trends improve, setting the company up for the double-barreled benefit of revenue acceleration and margin expansion,” Frankel wrote. “Willing to patiently await the turn.” — CNBC’s Michael Bloom contributed to this report.
