RH Jumps as Analysts Laud Report and Revenue Outlook

Home-goods retailer RH received a number of bullish calls from analysts after raising its fiscal 2021 revenue guidance.
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Shares of RH  (RH) - Get Report jumped Thursday as analysts lauded the home-décor retailer's better-than-expected second-quarter results and higher revenue guidance. 

RH shares at last check jumped 15% to $702.79. The Corte Madera, Calif., company's stock on April 29 touched a 52-week high above $733.

Analysts at Wells Fargo raised their price target on RH to $725 a share from $700 and maintained an overweight rating. 

"Another very impressive result with triple-digit demand, 78% sales growth and 8.5%/11.3% increases in the fiscal 2021 sales/EBIT outlooks," analyst Zachary Fadem said. 

Cowen analyst Max Rakhlenko maintained his outperform rating while lifting the price target to $750 from $680. 

The retailer's wider margins are "here to stay," the analyst wrote. Rakhlenko expects RH to maintain a "full-price model and maintain its luxury positioning and brand equity."

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At Jefferies analyst Jonathan Matuszewski reiterated a hold rating while raising his price target to $620 from $500.

He says the company's results beat even "lofty buy-side expectations." Sales were supported by wide-margin luxury and secondary home renovations, a record stock market and low interest rates. 

RH's strong EBIT-margin expansion outlook makes the stock "worthy of a multiple above public furniture peers," he said.

But current price-to-earnings levels "[feel] lofty and we'd look for a better entry," according to Matuszewski.  

On Wednesday after the market closed, RH raised its revenue guidance. The company now expects revenue growth between 25% and 30% in 2021 compared with its prior outlook for growth between 15% and 20%.