Gold prices steady, holding sharp gains in wake of soft U.S. jobs data
On Thursday, TD Cowen maintained its Buy rating on Restoration Hardware (NYSE:RH) but significantly reduced the stock’s price target from $510.00 to $220.00. The adjustment follows the company’s fourth-quarter results, which did not meet expectations, and a cautious fiscal year 2025 revenue forecast. According to InvestingPro data, RH’s stock has declined over 36% year-to-date, with current trading levels showing the stock is moderately overvalued based on Fair Value analysis. Max Rakhlenko, an analyst at TD Cowen, cited multiple factors contributing to a challenging stock response, including softer than anticipated fourth-quarter results, rising tariffs, and concerns over free cash flow and liquidity.
Rakhlenko noted that Restoration Hardware’s revenues are still leading in the industry but are decelerating. He pointed out the potential impact on future growth due to a declining wealth effect, particularly with the company’s elevated inventory levels. InvestingPro analysis shows the company maintains a current ratio of 1.43, indicating liquid assets exceed short-term obligations, though its overall financial health score is rated as weak. Despite this, the firm maintains its Buy rating on the stock but has revised the price target downward.
The analyst explained that the current narrative around Restoration Hardware is dominated by bears, considering the various concerns and the noise from the recent earnings report. He suggested that these factors, combined with the declining wealth effect and liquidity questions, may cause the stock to remain range-bound in the near term.
The new price target of $220.00 is based on 14 times TD Cowen’s fiscal year 2026 estimated earnings per share of $16.22. The adjustment also led to the stock being lowered in the firm’s conviction list, now positioned outside the top three. The after-hours price of Restoration Hardware’s stock was around $184.00 when the new price target was announced.
In other recent news, Restoration Hardware reported mixed fourth-quarter earnings and revenue guidance that fell short of expectations. Despite this, Stifel maintained a Buy rating with a $450 price target, citing strong profitability guidance for fiscal year 2025. Conversely, Citi downgraded Restoration Hardware to Neutral and significantly reduced its price target to $200, citing concerns over tariffs and slowing consumer spending. KeyBanc maintained its Sector Weight rating, expressing caution due to unmet financial expectations and the impact of tariffs on consumer behavior. Meanwhile, Guggenheim cut the price target to $300 but retained a Buy rating, highlighting strong fourth-quarter demand despite tariff-related uncertainties. Telsey Advisory Group increased its price target to $280, maintaining an Outperform rating, and noted a stabilization in demand despite negative free cash flow in the fourth quarter. These recent developments reflect a complex landscape for Restoration Hardware, with analysts weighing strong profitability forecasts against external pressures and market uncertainties.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.