Zacks Investment Research Downgrades Restoration Hardware (RH) to Hold

Zacks Investment Research lowered shares of Restoration Hardware (NYSE:RH) from a buy rating to a hold rating in a report issued on Friday.

According to Zacks, “RH posted strong second-quarter fiscal 2018 results, with earnings beating the Zacks Consensus Estimate by 17.8% and also increasing more than three times from the year-ago quarter despite lower-than-expected revenues. RH’s focus on managing the business with a bias for earnings versus revenue growth seems to have paid off. Adjusted gross margins expanded 800 basis points on higher-full-price/lower clearance sales and supply-chain efficiencies. While revenue miss and lower revenue guidance raise concerns, stellar quarterly performance and increased guidance for 2018 operating margin and EPS are encouraging. Meanwhile, shares have outperformed its industry year to date. Estimates for 2018 have also been trending upward. Initiatives like RH Modern, RH Teen, RH Hospitality, the redesign of RH Interiors Source Book and the rollout of Design Ateliers across the company’s retail galleries are expected to drive growth in 2018 and beyond.”

Several other equities research analysts have also issued reports on the stock. ValuEngine lowered shares of Restoration Hardware from a buy rating to a hold rating in a research report on Thursday, September 6th. Deutsche Bank increased their price objective on shares of Restoration Hardware from $160.00 to $178.00 and gave the stock a buy rating in a research report on Wednesday, September 5th. William Blair reissued an outperform rating on shares of Restoration Hardware in a research report on Wednesday, September 5th. Stifel Nicolaus increased their price objective on shares of Restoration Hardware from $125.00 to $142.00 and gave the stock a hold rating in a research report on Wednesday, September 5th. Finally, Piper Jaffray Companies increased their price objective on shares of Restoration Hardware to $165.00 and gave the stock a neutral rating in a research report on Wednesday, September 5th. One research analyst has rated the stock with a sell rating, twelve have given a hold rating and eight have assigned a buy rating to the company’s stock. The stock has a consensus rating of Hold and a consensus price target of $127.50.

Shares of RH stock opened at $136.94 on Friday. Restoration Hardware has a one year low of $68.39 and a one year high of $164.49. The company has a quick ratio of 0.17, a current ratio of 0.83 and a debt-to-equity ratio of 4.99. The company has a market cap of $2.83 billion, a P/E ratio of 44.90, a P/E/G ratio of 0.72 and a beta of 2.00.

Restoration Hardware (NYSE:RH) last issued its quarterly earnings results on Tuesday, September 4th. The company reported $2.05 EPS for the quarter, topping the consensus estimate of $1.75 by $0.30. Restoration Hardware had a net margin of 4.29% and a return on equity of 520.85%. The firm had revenue of $642.00 million during the quarter, compared to analyst estimates of $660.89 million. During the same quarter in the prior year, the business posted $0.65 earnings per share. Restoration Hardware’s revenue for the quarter was up 3.7% compared to the same quarter last year. research analysts anticipate that Restoration Hardware will post 7.19 EPS for the current year.

In other news, Director Ali Rowghani sold 3,024 shares of the company’s stock in a transaction on Wednesday, September 12th. The shares were sold at an average price of $129.68, for a total value of $392,152.32. Following the completion of the transaction, the director now directly owns 6,953 shares in the company, valued at $901,665.04. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Gary G. Friedman bought 7,622 shares of the firm’s stock in a transaction dated Thursday, September 13th. The stock was purchased at an average price of $131.19 per share, with a total value of $999,930.18. Following the completion of the purchase, the chief executive officer now directly owns 2,253,332 shares of the company’s stock, valued at approximately $295,614,625.08. The disclosure for this purchase can be found here. 29.70% of the stock is owned by corporate insiders.

Hedge funds have recently made changes to their positions in the company. SG Americas Securities LLC boosted its stake in shares of Restoration Hardware by 100.7% in the first quarter. SG Americas Securities LLC now owns 1,602 shares of the company’s stock valued at $153,000 after purchasing an additional 224,707 shares during the period. Jump Trading LLC purchased a new position in shares of Restoration Hardware in the first quarter valued at $202,000. Koch Industries Inc. purchased a new position in shares of Restoration Hardware in the first quarter valued at $205,000. WINTON GROUP Ltd purchased a new position in shares of Restoration Hardware in the first quarter valued at $272,000. Finally, Systematic Financial Management LP purchased a new position in shares of Restoration Hardware in the first quarter valued at $369,000.

Restoration Hardware Company Profile

RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and teen furnishings. The company provides its products through its retail galleries; and Source Books, a series of catalogs, as well as online through rh.com, restorationhardware.com, rhbabyandchild.com, rhteen.com, and rhmodern.com, as well as waterworks.com.

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