Rackspace Technology stock price target lowered to $1.40 by BMO Capital

Investing.com - BMO Capital has lowered its price target on Rackspace Technology Inc . (NASDAQ:RXT) to $1.40 from $1.75 while maintaining a Market Perform rating on the stock. The stock, currently trading at $1.21, has seen a steep decline of 58% over the past six months, according to InvestingPro data.

The firm cited Rackspace’s June quarter performance as "solid against low expectations," noting improvement in top-line trends with a 3.2% year-over-year constant currency decline compared to a 3.7% decline in the previous quarter.

Rackspace’s guidance indicates further improvement expected in the third quarter, with BMO Capital viewing the company’s fiscal year 2025 bookings commentary as positive.

Despite these improvements, BMO Capital believes Rackspace still has "more work to be done to reach growth and profitability," which factored into the decision to reduce the price target.

The firm’s maintained Market Perform rating reflects a balanced view on Rackspace’s current business trajectory, acknowledging positive steps while recognizing ongoing challenges.

In other recent news, Rackspace Technology reported its second-quarter 2025 earnings, which showed a wider-than-expected loss per share but a slight revenue beat. The company posted an earnings per share (EPS) of -$0.06, which was below the forecasted -$0.04, indicating a 50% wider loss than analysts had anticipated. However, revenue came in at $666.3 million, surpassing expectations of $661.96 million. These recent developments highlight the mixed results for Rackspace, with revenue slightly exceeding projections despite the greater-than-expected loss. The earnings announcement was followed by a rise in Rackspace’s stock in aftermarket trading.

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