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Private social club company Soho House could continue to benefit from a lack of real competition in the leisure space, according to Bank of America. The bank double upgraded shares of Soho House to buy from underperform and raised its price target to $8 per share from $7. That represents about 23% upside from the stock’s Monday closing price of $6.47. Soho House primarily focuses on private membership clubs, with over 30 social and work locations. SHCO YTD mountain Bank of America upgrades shares of Soho House on Tuesday and predicts as much as 23% upside. Analyst Shaun Kelley said robust international travel demand, coupled with lesser potential operational difficulties, could help the company benefit from the summer season. “Heading into summer travel season, we favor international exposure vs. domestic and view Soho House (with ~60% of its revenues from outside the US) as a prime beneficiary,” Kelley said. The firm reversed course from an October downgrade that cited headwinds related to the dollar as well as steep price pressures. Now, Kelley said, company management is in a better position to handle and navigate the potential challenges ahead. “While inflation is not going away, management handled challenges better than expected in Q4 and we think they can continue to methodically find offsets as the business scales,” Kelley said. — CNBC’s Michael Bloom contributed to this report.
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