Loop Capital cuts RH stock target to $190, maintains Hold

On Friday, Loop Capital Markets adjusted their outlook on Restoration Hardware (NYSE:RH) shares, reducing the price target significantly from $450.00 to $190.00, while keeping a Hold rating on the stock. The stock, currently trading at $149.39, has seen a dramatic 37% decline in just the past week. According to InvestingPro data, analyst targets for RH range from $130 to $510, reflecting significant market uncertainty. The move follows the company’s fiscal fourth quarter 2024 performance, which did not meet the analyst’s expectations.

Restoration Hardware reported earnings that fell short of what analysts had anticipated, leading to concerns about the company’s future profitability. The company’s current financial health score on InvestingPro is rated as WEAK, with 14 analysts recently revising their earnings expectations downward. Despite the company’s fiscal 2025 guidance aligning with consensus forecasts, Loop Capital expressed reservations about the potential for Restoration Hardware to achieve the implied profit increase in the latter three quarters of the year.

The analyst, Anthony Chukumba, voiced additional concerns regarding the new tariffs imposed by the Trump administration, which were announced on the same afternoon. The tariffs are substantial, affecting a range of countries from which Restoration Hardware sources its products. These include a 34% tariff on goods from China, 46% on Vietnam, 32% on Indonesia, and 26% on India. With the stock already down 55% over the past six months and trading at high valuation multiples, these tariffs could further pressure margins on the company’s $3.18 billion in annual revenue.

The impact of these tariffs could extend beyond the direct cost increases for imported goods. There is also worry about the potential effect on the confidence of affluent consumers, who are a key demographic for Restoration Hardware’s high-end home furnishings.

In summary, the revised price target of $190 reflects a cautious stance by Loop Capital in light of both the disappointing fiscal fourth quarter results and the broader economic factors that could influence Restoration Hardware’s performance in the upcoming fiscal year. The firm maintains its Hold rating despite the significant cut in the price target.

In other recent news, Restoration Hardware has been the subject of several analyst reviews following its latest financial results. UBS analyst Michael Lasser has adjusted the company’s price target to $235, maintaining a Neutral rating, citing concerns over future financial estimates and liquidity issues. Meanwhile, TD Cowen has significantly lowered its price target to $220, while still keeping a Buy rating, due to softer-than-expected fourth-quarter results and a cautious revenue forecast for fiscal year 2025. Stifel remains optimistic, maintaining its Buy rating and a $450 price target, highlighting the company’s stronger-than-anticipated profitability guidance for FY25.

Citi has downgraded Restoration Hardware from Buy to Neutral, reducing the price target to $200, citing the complex external environment and potential challenges from tariffs and slowing consumer spending. KeyBanc Capital Markets has maintained a Sector Weight rating, pointing out that the company’s sales and earnings per share did not meet expectations, partly due to decreased demand and macroeconomic uncertainties. Restoration Hardware’s guidance for 2025 has been conservative, reflecting ongoing concerns about tariffs and their impact on consumer behavior. Analysts have noted the company’s elevated inventory levels, which could provide short-term flexibility amidst these challenges. Restoration Hardware’s ability to navigate these issues while maintaining its growth trajectory remains a focal point for investors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.