Stifel cuts RH stock price target to $390, maintains Buy rating

On Monday, Stifel analysts adjusted their stance on Restoration Hardware, trading on the New York Stock Exchange under the ticker (NYSE:RH), by lowering the price target to $390 from the previous $450, while still endorsing the stock with a Buy rating. Currently trading at $145.66, RH’s analyst targets range from $129 to $510, with a consensus recommendation leaning towards Buy. The revision follows the company’s fourth-quarter fiscal year 2024 earnings release that occurred on Friday evening. According to InvestingPro data, 14 analysts have recently revised their earnings expectations downward for the upcoming period.

The analysts expressed that despite the reduction in the price target, their optimistic Buy rating persists, influenced by a balanced scenario analysis. This analysis takes into account a slightly weaker revenue forecast counterbalanced by an improved profitability outlook. InvestingPro data shows RH maintains a gross profit margin of 44.48% and expects 11% revenue growth in FY2026, though the company operates with a significant debt burden. The new target does not include potential adverse effects from what the analysts refer to as Liberation Day tariffs, which could present a $362 million EBITDA challenge in FY24 if not further mitigated.

Restoration Hardware’s stock experienced a significant 42% drop post-earnings, a contrast to the S&P 500’s 10.5% decline in the same period. Stifel’s analysts suggest that this sharp decline might already reflect the worst-case scenario for the company. They also commented on the initial tariff announcement, viewing it as an aggressive starting point that could lead to some tariffs remaining, potential retaliations from other countries, but ultimately expect concessions, especially from countries heavily reliant on trade, such as Vietnam.

The analysts believe that Vietnam, which holds significant importance for companies like Restoration Hardware and Floor & Decor, is likely to be motivated to alleviate the pressure of tariffs. Stifel anticipates that the fundamental strengths of Restoration Hardware will regain attention as more evidence emerges to support their view and as market enthusiasm grows for the company’s strategic positioning.

Prices for Restoration Hardware’s shares were noted as of the close on April 4, 2025.

In other recent news, Restoration Hardware’s financial results and analyst ratings have been making headlines. The company’s first-quarter performance aligned with revenue growth guidance of 12.5%-13.5%, and there is an expectation of positive free cash flow by 2025, according to Telsey Advisory Group, which maintained an Outperform rating with a $280 price target. Meanwhile, Stifel reduced its price target to $390 from $450, maintaining a Buy rating, citing a slightly weaker revenue forecast but stronger profitability expectations. Loop Capital significantly lowered its price target to $190 from $450, keeping a Hold rating due to disappointing fiscal fourth-quarter results and concerns over new tariffs impacting profitability.

UBS also adjusted its price target to $235 from $250, maintaining a Neutral rating, as the company’s guidance fell short of market expectations and anticipated tariffs could affect demand. Restoration Hardware’s liquidity concerns were noted, with cash reserves at approximately $30 million, and inventory levels higher than peers. TD Cowen cut its price target to $220 from $510, while maintaining a Buy rating, due to softer-than-expected fourth-quarter results and rising tariffs. Despite these challenges, Restoration Hardware’s sales grew by 18% on an underlying basis in the fourth quarter, outpacing its peers.

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