Morgan Stanley upgrades RH on growth potential

Investing.com -- Morgan Stanley upgraded RH (NYSE: RH) to "Overweight" with a price target of $530, citing improving fundamentals and growth momentum.

The brokerage sees stepped-up launches of high-quality collections, a favourable "wealth effect" among affluent households, and easing headwinds from housing turnover as key drivers.

Operating leverage is described as substantial and underappreciated, positioning RH for revenue acceleration. Morgan Stanley (NYSE: MS) views the stock as being in the early stages of a positive inflection, with long-term fundamentals set to dominate discussions again.

Morgan Stanley also highlighted that that the tariff risk was mitigated, as RH has largely moved sourcing away from China and exposure to Mexico is also in transition.

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