Market Overview

Wedbush: Unlike Many Retail Peers, RH Is 'Thriving'

Wedbush: Unlike Many Retail Peers, RH Is 'Thriving'

Many home furnishing retailers are struggling, but RH (NYSE: RH) stands out as "thriving," according to Wedbush.

The Analyst

Wedbush's Seth Basham initiated coverage of RH with an Outperform rating and $145 price target.

The Thesis

RH stands out among its home furnishing retail group peers by offering a highly differentiated experience, Basham said in a note. Specifically, the company is able to attract shoppers to its stores by offering food and beverage options along with free design services, which warrants the status as being the largest national ultra-premium furniture and decoration retailer.

Basham said RH's store is "the nucleus" of the overall experience as items on display in stores sell 50 to 150 percent better than if it's only offered online or in categories. Encouragingly, the direct channel is "highly synergistic" and showcases 90 percent of merchandise not shown in legacy galleries and fulfills 97 percent of orders placed online and in stores.

Meanwhile, management's transformation of its properties from legacy to next generation galleries remains ongoing with 18 out of 65 stores completed, the analyst wrote. The company is also working to transform its supply chain for better efficiency as distribution and delivery likely costs at least $250 million.

RH's management guided towards 8 to 12 percent revenue growth and 15 to 20 percent EPS growth. Basham said these estimates are likely conservative if the company is successful in expanding internationally and gaining new exposure to secondary U.S. markets.

Price Action

Shares of RH were trading higher by more than 4.6 percent Tuesday to $114.18.

Related Links:

RH's Retail Strategy, Recent Pullback Turn Stifel Bullish

KeyBanc: Buy The Dip In RH Shares

Latest Ratings for RH

Sep 2019MaintainsNeutral
Sep 2019MaintainsBuy
Sep 2019MaintainsOutperform

View More Analyst Ratings for RH
View the Latest Analyst Ratings

Posted-In: Furniture Home Furnishing retail retailersAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga


Related Articles (RH)

View Comments and Join the Discussion!

Latest Ratings

LOWRBC CapitalMaintains129.0
MARRBC CapitalMaintains148.0
CRLSunTrust Robinson HumphreyMaintains162.0
CFRSunTrust Robinson HumphreyMaintains105.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Despite Recent Rout, This Analyst Says The S&P 500 Could Still End 2018 Near 3,000

How Open Source 'Can Become The Default' In Financial Services Collaboration