Sell Rating on RH Due to Declining Demand and Financial Pressures

Analyst Curtis Nagle from Bank of America Securities maintained a Sell rating on RH (RH – Research Report) and keeping the price target at $180.00.

Curtis Nagle’s rating is based on several concerning trends affecting RH’s financial outlook. Firstly, the data indicates a slowdown in industry spending and high-end home volume growth, which could negatively impact RH’s revenue projections. The aggregated credit and debit card data from Bank of America shows a decline in spending at high-end furniture retailers, suggesting weaker demand for RH’s products.
Additionally, while recent tariff reductions provide some relief, they do not fully offset the pressures from weakened discretionary demand. RH’s high net debt leverage remains a significant concern for investors, and the company’s excess inventory, although beneficial for product costs, may not be enough to prevent a downward revision of its financial guidance. These factors collectively contribute to the Sell rating, as they pose risks to RH’s ability to meet its growth targets through 2025.

According to TipRanks, Nagle is an analyst with an average return of -2.1% and a 49.62% success rate. Nagle covers the Consumer Cyclical sector, focusing on stocks such as RH, Wayfair, and Etsy.