Analyst Zachary Fadem of Wells Fargo maintained a Buy rating on RH, boosting the price target to $295.00.
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Zachary Fadem has given his Buy rating due to a combination of factors that suggest a positive outlook for RH. Despite concerns over high leverage and potential second-half challenges, Fadem sees significant potential for recovery as interest rates begin to ease. The company has consistently gained market share over the past quarters, and its pricing strategies have remained firm, which supports the expectation of in-line sales growth for the second quarter.
Furthermore, RH’s strategic initiatives, such as the opening of new galleries including a promising launch in Paris, and the introduction of new Sourcebook editions, are expected to drive future growth. Although there are uncertainties related to tariffs affecting second-half margins, Fadem believes that RH’s sales forecast for 2025 remains robust. The analyst also highlights the successful RH Paris opening, which bolsters confidence in RH’s expansion into the European market and its potential to become a significant revenue contributor.