Restoration Hardware (RH) PT Raised to $750, Cowen Sees 4 Key Points to the Report
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Cowen analyst Max Rakhlenko raised the price target on Restoration Hardware (NYSE: RH) to $750.00 (from $680.00) after the company reported EPS of $4.89 clearing elevated investor expectations. Sales grew +78.3% and the EBIT margin came in at 22.6%. Guidance was strong but leaves room to beat both sales & margin targets.
The analyst anticipates the company raising guidance throughout FY21 and offered 4 takeaways while maintaining an Outperform rating:
1) Structurally Higher Margins Are Here To Stay: The analyst is constructive on management's commentary the stress tested model suggests EBIT margin should remain above 20% in most downside scenarios.
2) Robust Guidance With Upside Potential: RH raised its FY21 sales guide to +25% to 30%,including 2Q to +35% to 37%, and implicitly raised 2H21 to +5% to +13%
3) Poised To Comp-The-Comp In 2H & FY22: The analyst is constructive on the set up into 2H21 and FY22, and sees a path to sales +11% and +9% respectively.
4) 1Q Ahead Of Elevated Expectations: RH ended a record quarter with demand +101% and sales +78.3% (+43.7% above 1Q19), well above elevated expectations.
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