Parsing an Irrational Defense of WSM

Williams-Sonoma (WSM), with little in the way of short interest, stunned investors Wednesday with surprisingly bad guidance.

Enter Goldman Sachs with a report Thursday defending (sort of) the company. Except the defense makes zero sense.

The headline on the report says, "Bump in road painful off peak multiple, but story on track."

The analyst, Matthew Fassler, then goes on to say that the second quarter was merely a "short-term detour from a trend that is likely to give way to a better second half."

There's only one problem with that.

He cut his earnings forecasts for the third quarter, the entire year and the next two years. But he increased his 12-month price forecast?

Really?

Indeed he did and I can speculate why he did -- but won't.

For what it's worth, six weeks ago or so, doing my rounds with sources, I was chatting up a money manager on names he thought were poised to blow. "Williams-Sonoma," he said.

I was busy on another project and didn't get around to it, so asked him today: "What's the next Williams-Sonoma?"

He said, "Still much more to go here."

Herb Greenberg does not own shares, short or trade shares in an individual corporate security.