Stifel has maintained its Buy rating on shares of Restoration Hardware (NYSE: RH (NYSE:RH)), with a consistent price target of $315.00.
The focus is on the upcoming second-quarter fiscal year 2024 earnings for Restoration Hardware, which are scheduled to be released after the market closes on September 12, 2024. Stifel's analysis suggests that the forthcoming results could provide a pivotal moment for the company, potentially recalibrating market expectations.
The firm anticipates that the mixed yet supportive trends in premium furnishings could signal a turning point, though not to the extent of validating the company's ambitious guidance for the full fiscal year 2024.
Stifel's earnings forecast for the fiscal year remains below the company's guidance and the consensus, which has been trending downward as the earnings announcement approaches.
Stifel is closely monitoring several key aspects of Restoration Hardware's business. These include the acceleration in customer demand, gross margin performance, and commentary on the same, with expectations of continued improvement and stable product margin performance.
Additionally, the firm is looking at the company's plans for new store openings in fiscal year 2024, which are deemed crucial for building confidence in Restoration Hardware's strategy to expand its North America Design Galleries.
Stifel's valuation model, which is based on 9 times the estimated enterprise value to forecasted fiscal year 2026 earnings before interest, taxes, depreciation, and amortization (EV/FY26E EBITDA), suggests that the current stock price significantly underestimates Restoration Hardware's long-term growth potential.
The valuation provides what Stifel believes is a considerable margin for error.
In other recent news, Restoration Hardware has been the subject of several key developments. Telsey Advisory Group maintained its Market Perform rating on the company, revising its 2024 earnings estimate to $7.30 per share, down from $8.30, and slightly above the FactSet consensus of $7.28.
The decision was influenced by a predicted downturn in the home furnishing sector due to high mortgage rates. Meanwhile, BofA Securities adjusted its price target down to $310 from $325, despite affirming a Buy rating. BofA anticipates second-quarter revenue, EBIT, and EPS figures that slightly surpass Wall Street expectations.
Stifel, another financial services firm, initiated coverage on Restoration Hardware shares with a Buy rating and a price target of $315.00. The move followed the company's Q1 2024 results, which fell short of expectations, with reported revenues of $727 million and a projected revenue growth target of 3-4% for Q2 2024.
CEO Gary Friedman invested $10 million in company stock, increasing his stake to approximately 25.1% of the company's outstanding common stock. Additionally, at the company's annual shareholder meeting, three nominees were elected as Class III directors to the board, and shareholders approved the compensation of named executive officers and ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year 2024.
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