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UPDATE: Goldman Sachs Sees 18% Upside Potential in Restoration Hardware (RH), Upgrades to Buy

March 30, 2015 6:54 AM EDT
Get Alerts RH Hot Sheet
Price: $279.47 --0%

Rating Summary:
    10 Buy, 22 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 7 | New: 39
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(Updated - March 30, 2015 8:53 AM EDT)

Goldman Sachs upgraded Restoration Hardware (NYSE: RH) from Neutral to Buy with a price target of $114.00 (from $106.00). Analyst Matthew J. Fassler thinks Restoration Hardware is well-positioned for ecommerce and is a solid footage growth story. He also pointed out its business is levered to housing turnover and home prices, which continue to show year-on- year improvement.

Fassler listed catalysts for the company.

  • "Our checks suggest RH will introduce product with a more contemporary aesthetic, helping the firm maintain best-in-class comp-brand sales growth."
  • "We expect RH to correct a misstep in catalog distribution that led to excessive mailings, driving suboptimal marketing efficiency and poor PR from massive – and mass – mailings of multiple books."
  • "We also believe the market has absorbed guidance to mid-teens compbrand revenue growth in 2015 (we expect stabilization in the mid-teens in 2016), as well as challenges related to the recent port slowdown. As a result, the stock’s valuation looks appealing relative to its growth metrics."

For an analyst ratings summary and ratings history on Restoration Hardware click here. For more ratings news on Restoration Hardware click here.

Shares of Restoration Hardware closed at $96.92 yesterday.



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