Restoration Hardware Holdings Inc. (RH) Stock Price Up 9.8% on Analyst Upgrade

Restoration Hardware Holdings Inc. (NYSE:RH) shot up 9.8% on Tuesday after Zacks Investment Research upgraded the stock from a sell rating to a hold rating. The company traded as high as $75.40 and last traded at $75.02, with a volume of 3,884,073 shares changing hands. The stock had previously closed at $68.30.

According to Zacks, “RH’s shares widely outperformed the Zacks categorized Retail-Home Furnishings industry year to date. The company’s efforts to redesign its supply chain network, rationalize product offerings and the Waterworks acquisition are expected to boost growth. Initiatives like RH Modern, RH Teen, RH Hospitality, the redesign of RH Interiors Source Book, the rollout of Design Ateliers across the company’s retail Galleries are expected to contribute to growth in 2017 and beyond. Though RH’s plans to rationalize product offering, reduce inventories and boost free cash flow will drive revenues and cash flow, it is expected to dent earnings in 2017. Also, higher dependence on imports makes it vulnerable to uncertain macro conditions.”

RH has been the topic of several other reports. Oppenheimer Holdings, Inc. reissued a “hold” rating on shares of Restoration Hardware Holdings in a report on Saturday, May 6th. UBS Group AG boosted their target price on Restoration Hardware Holdings from $34.00 to $45.00 and gave the stock a “neutral” rating in a report on Wednesday, March 29th. Barclays PLC set a $65.00 target price on Restoration Hardware Holdings and gave the stock a “hold” rating in a report on Sunday. Guggenheim reissued a “buy” rating and issued a $75.00 target price (up from $60.00) on shares of Restoration Hardware Holdings in a report on Monday. Finally, KeyCorp reissued a “sector weight” rating on shares of Restoration Hardware Holdings in a report on Monday. Two analysts have rated the stock with a sell rating, thirteen have issued a hold rating, five have given a buy rating and one has given a strong buy rating to the stock. The company presently has a consensus rating of “Hold” and an average price target of $50.65.

Several hedge funds have recently modified their holdings of the stock. BlackRock Inc. boosted its stake in shares of Restoration Hardware Holdings by 18,735.0% in the first quarter. BlackRock Inc. now owns 4,680,693 shares of the company’s stock valued at $216,529,000 after buying an additional 4,655,842 shares during the last quarter. Vanguard Group Inc. boosted its stake in Restoration Hardware Holdings by 14.5% in the first quarter. Vanguard Group Inc. now owns 3,352,950 shares of the company’s stock worth $155,107,000 after buying an additional 423,925 shares in the last quarter. Credit Suisse AG purchased a new stake in Restoration Hardware Holdings during the first quarter worth approximately $15,995,000. Ameriprise Financial Inc. boosted its stake in Restoration Hardware Holdings by 144.9% in the first quarter. Ameriprise Financial Inc. now owns 580,199 shares of the company’s stock worth $26,840,000 after buying an additional 343,334 shares in the last quarter. Finally, Chescapmanager LLC purchased a new stake in Restoration Hardware Holdings during the first quarter worth approximately $13,230,000.

The stock has a market capitalization of $2.49 billion, a price-to-earnings ratio of 196.39 and a beta of 1.47. The company’s 50 day moving average price is $58.28 and its 200-day moving average price is $43.98.

Restoration Hardware Holdings (NYSE:RH) last issued its quarterly earnings results on Thursday, June 1st. The company reported $0.05 EPS for the quarter, hitting analysts’ consensus estimates of $0.05. The company had revenue of $562.10 million for the quarter, compared to analyst estimates of $560.30 million. Restoration Hardware Holdings had a net margin of 0.66% and a return on equity of 6.42%. Restoration Hardware Holdings’s revenue was up 23.4% compared to the same quarter last year. During the same quarter in the previous year, the business earned ($0.05) earnings per share. On average, equities analysts expect that Restoration Hardware Holdings Inc. will post $2.04 earnings per share for the current year.

Restoration Hardware Holdings declared that its Board of Directors has approved a share repurchase program on Thursday, May 4th that allows the company to buyback $700.00 million in outstanding shares. This buyback authorization allows the company to reacquire up to 37.6% of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s board believes its shares are undervalued.

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About Restoration Hardware Holdings

RH, formerly Restoration Hardware Holdings, Inc, is a retailer in the home furnishings marketplace. As of January 28, 2017, the Company had two segments: RH Segment and Waterworks. It offers merchandise assortments across a range of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and child and teen furnishings.