Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Analysts cut Revolve Group on near-term pressures

Published 01/04/2024, 10:55 AM
Updated 01/04/2024, 10:57 AM
© Reuters.  Analysts cut Revolve Group (RVLV) on near-term pressures
RVLV
-

Revolve Group (NYSE:RVLV) shares dropped in early Thursday trading after the company's shares were downgraded by analysts at Baird and Jefferies.

The stock initially fell over 4% before regaining some of its earlier losses. It currently trades at around $15.46, down approximately 2.6%.

Analysts at Baird downgraded RVLV to Neutral from Outperform, maintaining the $17 per share price target. The analysts noted the company's shares have rallied 20% in the past three months, pushing the valuation to 34x P/E, near the historical average.

"Though progress has been made on internal initiatives to clean up inventory and implement cost savings measures, this has been overshadowed by ongoing demand pressures," they wrote. "Top-line inflection is the predominant issue for the stock (needed to drive confidence in share gain story, get leverage in operating model), and timing remains uncertain amid ongoing pressures on aspirational consumer spending and a generally tough backdrop for luxury e-commerce (FWRD still working through excess inventory)."

Baird continues to believe RVLV's model can gain share in the long term but feels the risk/reward appears more balanced at a higher valuation amid "a still-cloudy demand outlook."

Meanwhile, analysts at Jefferies lowered RLV to Hold from Buy, also keeping a $17 price target on the shares.

They believe consumer pressures will likely subdue the company's near-term performance.

"Internet apparel retailers have collectively struggled in recent quarters as consumer demand trends have softened," they commented. "We believe the macro environment is likely to continue to pressure consumer discretionary spending for the foreseeable future, and RVLV is not immune."

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Jefferies is also positive on the long-term outlook for the stock, stating it will be a "long-term share gainer in the highly-fragmented apparel space," but they are moving to the sidelines based on near to mid-term uncertainty.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.