Skip to main content

Market Overview

Is There Light At The End Of The Tunnel For Restoration Hardware?

Share:
Is There Light At The End Of The Tunnel For Restoration Hardware?

Shares of Restoration Hardware Holdings Inc (NYSE: RH) plunged more than 16 percent as weak fourth-quarter outlook overshadowed the third-quarter top- and bottom-line beat from the furniture retailer.

Deutsche Bank said the current scenario sets up the question of positioning into 2017, given the 15 percent share drop and a much easier compare in 2017 with several potential tailwinds.

“We in fact believe RH is trying to set up 2017 to have as few moving parts as possible,” analyst Adam Sindler wrote in a note.

Bullish, Bearish Perspectives

Bulls are likely to focus on leverage of Grey Card and potential upside to Deutsche Bank’s modest approximate 10 to 15 bps estimate for shipping and occupancy leverage. Sindler said though revenues remain a wild card, comps could at least be “optically better.”

On the other hand, bears will point out volatility and low visibility. Bears may state the company’s outlook for sales and EPS growth in each quarter of 2017 as overly bullish given the current macro backdrop where high end furnishings are lagging.

“This uncertainty could allow bears to re-press shorts once the near-term trading is settled as longer-term investors remain on the sidelines,” Sindler continued.

Analyst's Conclusions

As such, the analyst is reiterating his Hold rating on the stock until the visibility improves and gains traction. Sindler also slashed the price target to $35 from $40.

At last check, shares of Restoration Hardware had fallen 15.93 percent on the day to $32.78.

Latest Ratings for RH

DateFirmActionFromTo
Mar 2022Wells FargoMaintainsOverweight
Jan 2022CitigroupMaintainsBuy
Sep 2021UBSMaintainsNeutral

View More Analyst Ratings for RH

View the Latest Analyst Ratings

 

Related Articles (RH)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings News Guidance Price Target Reiteration Analyst Ratings Movers Best of Benzinga

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com