RH (RH) still faces a weak demand outlook for home furnishings and risk to fiscal full-year guidance even with reduced tariffs, BofA Securities said Wednesday in a report.

"A weaker outlook for housing and consumer discretionary" spending looms even as "tariff costs will be far more manageable," BofA said.

Aggregated credit and debit card data from Bank of America and National Association of Realtors trends indicate that spending on premium home furnishings has decelerated, the report said.

"Guidance does not incorporate any tariff costs, which could still weigh" on gross margins in H2, the report said.

BofA raised the price objective on RH stock to $172 from $144, partly on the improved tariff outlook, and maintained the underperform rating.

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