By Dhirendra Tripathi

Investing.com – Wayfair (NYSE:) stock fell 5% Wednesday after Loop Capital downgraded the stock to ‘sell’ with a target of $90, about 27% lower than its current price of $123.

Analyst Laura Champine earlier had a ‘hold’ rating for the stock with a target of $95, according to StreetInsider.

The analyst points out that a slow replacement cycle is a key feature of the furniture industry and Covid-19 did indeed drive demand for the company’s furniture as the stimulus helped families create home offices and home schools.

But now, according to Champine, given the reopening and with most things back to normal, households don’t need two of those set-ups. Instead, she says many consumers are looking to spend on social activities and vacations they’ve been postponing.

“We see persistent cost pressures on every line of Wayfair’s income statement,” she said in her note. The brokerage has lowered its estimate for Wayfair’s current financial year revenue by $400 million and $1 billion for 2023.

She believes that advertising will remain expensive and less productive due to changes to Apple’s privacy rules.