Loop Capital analyst Anthony Chukumba reduced his rating on Rent-A-Center ( NASDAQ: RCII ) to Hold from Buy on Monday, advising the stock may have run too hot as of late.
Chukumba pointed to an over 30% jump for the stock since the start of 2023 as a concern, outsizing the downside risk.
“While our downgrade is primarily based on valuation, we also have some fundamental concerns given the dramatic pandemic-driven demand pull forwards in furniture and consumer electronics,” he told clients. “We would steer investors seeking exposure to the lease-to-own space to Aaron's ( AAN ) or PROG Holdings ( PRG ), both of which still have considerable upside potential to our current price targets and more compelling possible nearterm catalysts than Rent-A-Center in our opinion.”
Chukumba maintained a $30 price target on the stock. Shares of Rent-A-Center ( RCII ) slipped 5.25% after the market open on Monday.
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Rent-A-Center stock slips as Loop Capital cuts to Hold