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Investing.com - KeyBanc has reiterated its Sector Weight rating on Restoration Hardware (NYSE:RH), currently trading at $228.1 with a market cap of $4.28 billion, citing improved second-quarter trends compared to the first quarter. The company is set to report earnings in 10 days, with InvestingPro data showing strong recent momentum, including a 6.33% gain in the past week.
The firm noted that RH ran additional promotions in the second quarter, including 40% discounts on stocked sofas, sectionals, and chairs for RH members, which KeyBanc believes enhanced the company’s sales and cash flow performance. According to InvestingPro analysis, the company operates with a significant debt burden, though it maintains a current ratio of 1.37.
KeyBanc expressed cautious optimism about management’s guidance for improved trends in the second half of 2025, despite RH delaying its new concept launch from late 2025 to spring 2026 while competitors introduce new offerings this fall.
The research firm acknowledged potential long-term opportunities in RH’s product assortment and international expansion plans, particularly following the second mailing of the RH Interiors Sourcebook.
KeyBanc maintained its Sector Weight rating due to ongoing concerns about the uncertain consumer environment, heightened competition, and RH’s continuing work on inventory management, European expansion, and free cash flow generation. Trading at a P/E ratio of 54.12, RH shows relatively high valuation metrics. For deeper insights into RH’s financial health and growth potential, check out the comprehensive Pro Research Report available on InvestingPro, along with 10+ additional ProTips.
In other recent news, Restoration Hardware reported mixed first-quarter results, with revenues falling below expectations but earnings per share surpassing forecasts. The company’s performance was influenced by a shorter Outdoor selling season and broader economic uncertainties. Despite these challenges, Restoration Hardware maintained its full-year guidance, as noted by Stifel, which reiterated its Buy rating with a price target of $390.00. UBS kept a Neutral rating with a $215.00 price target, highlighting the company’s solid sales momentum and profitability in a challenging market. Jefferies also maintained a Hold rating, slightly raising the price target to $209.00, acknowledging the company’s ability to uphold its annual guidance amid luxury market pressures. TD Cowen reiterated a Buy rating with a $235.00 price target, citing the potential of the RH Montreal opening. Restoration Hardware’s full-year outlook is now more focused on the latter half of the year due to supply chain disruptions. The company also announced a delay in its planned brand extension to fiscal 2026.
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