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Investing.com - Stifel reduced its price target on Restoration Hardware (NYSE:RH) to $320.00 from $390.00 on Friday, while maintaining a Buy rating on the luxury furniture retailer’s stock. The company, currently trading at $228.12 with a market capitalization of $4.27 billion, is trading near its InvestingPro Fair Value.
The price target reduction follows RH’s second-quarter fiscal 2025 results, which came in below expectations at the low end of guidance, along with reduced full-year 2025 guidance that included a softer revenue outlook. Despite recent challenges, InvestingPro data shows the company maintained 9.56% revenue growth in the last twelve months.
Stifel noted that despite the disappointing results, which contrast with commentary from the first-quarter earnings call, the fundamental and valuation mismatch keeps their constructive approach intact.
The firm highlighted that while second-half 2025 revenue is slowing, it still suggests mid-single-digit to high-single-digit underlying revenue growth, with fiscal 2025 margin performance driven entirely by incremental unmitigated tariff headwinds as RH remains heavily invested in expansion initiatives.
Stifel viewed RH’s international commentary positively and noted stronger second-quarter free cash flow performance as a clear positive, though it acknowledged limited investor interest and enthusiasm with the stock currently trading at 6.8x enterprise value to fiscal 2027 estimated EBITDA.
In other recent news, Restoration Hardware reported its earnings for the second quarter of 2025, revealing results that fell short of expectations. The company posted an earnings per share (EPS) of $2.93, below the forecasted $3.18, and reported revenue of $899.2 million, which also missed the anticipated $906.58 million. Despite these figures, TD Cowen expressed optimism by raising its price target for Restoration Hardware to $265 from $235, maintaining a Buy rating on the stock. The firm highlighted a favorable top-line setup, suggesting that the company’s lowered guidance is achievable.
Meanwhile, KeyBanc reiterated its Sector Weight rating on Restoration Hardware, noting concerns over new tariffs and the delay in the release of the company’s Sourcebook catalog. The company’s guidance was adjusted to account for these factors, as explained by KeyBanc analyst Bradley Thomas. These developments come amid a mixed response from investors, who are weighing the company’s strategic growth plans against its recent earnings performance.
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