What Analysts Are Recommending for RH

As of April 7, 2017, RH (RH) was trading at $46.98. The stock price may have already factored in the estimates we’ve looked at in this series. In this final part of the series, we’ll look at analysts’ recommendations and estimated target price for the stock over the next 12 months.

RH’s better-than-expected fiscal 4Q16 earnings and measures adopted by management to improve sales appear to have compelled analysts to raise their price target for the next 12 months. As of April 7, 2017, analysts expect RH stock to reach $44.21, which represents a fall of 5.9% from its current level. Before its fiscal 4Q16 earnings were released, analysts had forecast a price target of $37.21.

Below are the 12-month target prices for RH’s peers:

• Bed Bath & Beyond (BBBY): $39.50 with a return potential of 0.03%
• Williams-Sonoma (WSM): $52.45, a fall of 3.7% from its current stock price

Of the 20 analysts following RH, 25.0% are recommending a “buy,” 70.0% are recommending a “hold,” and 5.0% are recommending a “sell.” On March 30, 2017, Goldman Sachs downgraded RH stock from a “buy” to a “neutral.”

RH stock moves in tandem with analysts’ recommendations. As analysts raise their 12-month target price, HD stock should also rise, and vice versa.

RH stock is trading higher than its target price. However, that doesn’t mean an automatic “sell.” Before making any investment decisions, be sure to carefully analyze all the factors we’ve covered in this series.