Newly ‘Uncovered’ Wayfair Pact May Be Boon for Rent-to-Own Firm

(Bloomberg) -- Wayfair.com added Progressive Leasing, owned by Aaron’s Inc., as a financing alternative on the e-commerce company’s site, according to KeyBanc Capital analyst Bradley Thomas, who said he recently “discovered” the new partnership.

His firm “uncovered” the change during recent channel checks, and the finding prompted him to boost his already Street high price target on Aaron’s even further. His research suggests that the Wayfair partnership was added about two months ago and he sees the pact possibly adding as much as 27% to the rent-to-own company’s annualized earnings per share.

Aaron’s shares are up as much as 6.7%, the most intraday since April 25. Thomas said the option to use Progressive Leasing is presented alongside two other subprime creditors and a lease-to-own competitor, Zibby. The choices are separate from the Wayfair credit card offering, “which seems to be the primary credit offering,” he wrote.

The new partnership -- along with Aaron’s expanding Best Buy pact -- prompted the analyst to raise his 2020 profit estimate to $4.55 from $4.50. He reiterated his buy-equivalent rating on Aaron’s and raised his target to $75 from $72.

“Aaron’s remains one of our favorite ideas, supported by the opportunity for national account roll-outs at Progressive,” Thomas said.

To contact the reporter on this story: Gregory Calderone in New York at gcalderone7@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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