Analyst Dara Mohsenian from Morgan Stanley maintained a Hold rating on Honest Company (HNST – Research Report) and keeping the price target at $5.50.
Dara Mohsenian has given his Hold rating due to a combination of factors impacting Honest Company’s performance. Despite the company showing progress in its transformation efforts and achieving better-than-expected results in the first quarter, there are significant macroeconomic risks that could affect its premium-priced product portfolio. The company’s maintained full-year guidance, while positive, is tempered by concerns over tariff impacts and the slowing growth in its product categories.
Additionally, while Honest Company experienced a revenue boost in the first quarter, much of this was attributed to timing benefits that are not expected to continue into the second quarter. The company also faces challenges from tariff-related margin impacts, which they plan to mitigate through cost-saving measures by fiscal year 2025. These factors, combined with the company’s current market share momentum, contribute to the decision to maintain a Hold rating, reflecting a cautious outlook amidst potential headwinds.
In another report released on April 30, Telsey Advisory also maintained a Hold rating on the stock with a $7.00 price target.