RH Is Poised For 'Positive Inflection' In 2025 Earnings: Analyst

Following three years of demand contraction, weak housing turnover and margin compression, RH RH appears to be "in the early stages of a positive inflection," according to Morgan Stanley.

The RH Analyst: Analyst Simeon Gutman upgraded the rating for RH from Equal-Weight to Overweight, while raising the price target from $435 to $530.

The RH Thesis: Although the path was challenging for most of 2023 and 2024, it is turning "decisively positive" into 2025 and investor focus should turn to the company's long-term fundamentals, Gutman said in the upgrade note.

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"RH’s new collection launch cadence is reaching peak acceleration with the mailing of the RH Modern Sourcebook (Nov. ’24, launching 54 new collections) and the RH Interiors and RH Outdoor Sourcebooks (Feb. ’25, launching 97 new collections)," the analyst wrote. These should "unlock pent-up demand" through 2025, he added.

The macro environment is improving, "with reversion ending, a positive wealth effect for upper income households, and the election behind us," Gutman wrote. "Tariff risk is mitigated, as RH has largely moved sourcing away from China and exposure to Mexico is also in transition," he further stated.

RH Price Action: Shares of RHhad risen by 0.69% to $417 at the time of publication on Monday.

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