3 RH Analysts On Headwinds For Luxury Home-Furnishings Company After Q4 Downbeat Earnings, Guidance

Shares of RH RH were down slightly on Thursday, after the company reported an earnings miss.

KeyBanc Capital Markets On RH

Analyst Bradley Thomas reiterated a Sector Weight rating on the stock.

RH reported disappointing fourth-quarter results and its guidance for the first quarter and full-year 2023 were short as well, Thomas said in a note.

“Ongoing pressure in the luxury homebuyer market and new risks from the banking crisis are weighing on demand, while RH resists running promotions (which should strengthen the brand LT but likely hurts market share today),” the analyst wrote. “While RH should benefit from new galleries, global expansion, and new products, we expect sales and EPS will remain pressured,” he added.

William Blair On RH

Analyst Phillip Blee reaffirmed an Outperform rating on the stock.

RH continues to “face headwinds related to declines in the housing market against difficult comparisons and waning backlog,” Blee said. “The company also maintains roughly $100 million in elevated backlog, largely expected to be fulfilled in fiscal 2023,” he added.

“The remaining backlog is relatively in line to that which was fulfilled in the prior year; however, we expect the comparable impact will likely be a headwind in 2024 as demand and lead times normalize from pandemic-related highs,” the analyst further wrote.

Check out other analyst stock ratings.

Telsey Advisory Group On RH

Analyst Cristina Fernández maintained a Market Perform rating, while reducing the price target from $280 to $225.

“As RH transitions to a luxury brand, it is shedding lower value customers to other Brands,” Fernández wrote in a note. “These factors, along with investments in international expansion, led RH to guide 2023 below expectations,” she added.

The brand remains healthy and the company has some exciting initiatives…[which] should begin to positively contribute to sales in 2H23,” the analyst further stated.

RH Price Action: Shares of RH were down 0.26% to $245.12 at the time of publication on Thursday.

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