On Friday, Guggenheim maintained a bullish stance on Restoration Hardware (NYSE: RH (NYSE:RH)), raising the stock's price target to $550 from $425, while reiterating a Buy rating. Currently trading at $381.38, RH has shown strong momentum with a 37.7% gain over the past six months. The adjustment follows Restoration Hardware's third-quarter performance, which aligned with the company's revenue guidance, demonstrating robust growth. According to InvestingPro, RH currently trades at premium valuations, with several key metrics suggesting the stock is trading above its Fair Value.
Restoration Hardware reported a 13% increase in total demand revenue for the third quarter, fitting within its forecast range of 12-14%. With an overall Financial Health Score rated as 'FAIR' by InvestingPro, the company maintains a solid gross profit margin of 44.4%. Notably, November saw a further acceleration to 18% in total demand, with RH Brand demand surging by 24%. Early December trends indicate an even more impressive 30% growth in RH Brand demand. These positive developments come on the heels of the recent launch of the new RH Modern sourcebook, which introduced approximately 54 new collections.
The company's forthcoming product launches, which include 89 new RH Interiors collections and 8 new RH Outdoor collections scheduled for early February 2025, have reinforced Guggenheim's confidence. The firm anticipates that Restoration Hardware's core product attributes, as discussed in their October Field Trip, will drive the company to reach peak demand levels over the next 12 to 24 months.
In light of these factors, Guggenheim has updated its estimates and reaffirmed Restoration Hardware as a top pick. The analyst's commentary highlights the foundational support from the third-quarter results for the 2025 base-to-bull-case framework, which projects earnings per share (EPS) of $15.00-20.00, significantly above the consensus forecast of approximately $11.90.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.