Analyst Max Rakhlenko from TD Cowen maintained a Buy rating on RH and increased the price target to $265.00 from $235.00.
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Max Rakhlenko has given his Buy rating due to a combination of factors that suggest a positive outlook for RH’s stock. He believes that the company’s revenue guidance for the second half of the year is achievable, with third-quarter revenue expected to grow between 8% and 10%, and fourth-quarter revenue potentially increasing by 8% to 14%. This confidence is bolstered by the expectation that underlying demand remains strong despite some headwinds.
Furthermore, Rakhlenko acknowledges the challenges related to EBIT margins, particularly in the fourth quarter, but sees potential for improvement. He notes that while there are concerns about the margin outlook, there are positive signs such as improved inventory management and free cash flow. Additionally, the prospect of multiple rate cuts and RH’s operational leverage contribute to his optimistic stance, leading him to maintain a Buy rating and raise the price target to $265.
Rakhlenko covers the Consumer Cyclical sector, focusing on stocks such as Home Depot, Planet Fitness, and RH. According to TipRanks, Rakhlenko has an average return of 13.0% and a 70.86% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $385.00 price target.