Restoration Hardware Crafts New High - Analyst Blog


Shares of Restoration Hardware Holdings, Inc . ( RH ) continued to ascend on Monday to reach a new 52-week high of $72.30, before closing at $71.92. Share prices of this luxury home furnishings retailer have more than doubled year to date.

Based on the current price, the company is 6.9% above the Zacks Consensus average analyst price target of $67.25. Restoration Hardware currently trades at a forward P/E of 48.8x, which is more than twice the peer group average of 22.6x. Additionally, the company's long-term estimated EPS growth rate is 23.8%, significantly higher than the peer group average.

Restoration Hardware is one such company which has been firing on all cylinders. On studying its earnings surprise history, we see that the stock has outperformed the Zacks Consensus Estimate by an average of 43.3% in the trailing 3 quarters, including a positive surprise of 50% in the recently concluded quarter.

The company posted impressive first-quarter fiscal 2013 results on Jun 13. The quarterly earnings of 6 cents a share surpassed the Zacks Consensus Estimate by a couple of cents and improved significantly from the loss of 4 cents witnessed in the year-ago quarter.

Encouraged by the strong quarterly results, Restoration Hardware raised its fiscal-2013 guidance. The company now expects top-line improvement in the range of 23% to 27%, up from its earlier guidance range of 19% to 22%. Moreover, earnings are forecasted in the range of $1.41 to $1.47 per share, significantly rising from its previous guidance range of $1.29 to $1.37.

We are encouraged by the company's strong performance, despite the challenging macroeconomic environment. The company's focus on strategic initiatives to drive growth and profitability in the luxury home furnishings market is quite encouraging.

Considering the strengths of the stock, Restoration Hardware carries a favorable Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Besides Restoration Hardware, other stocks worth considering in the home furnishings & fixtures sector include Fortune Brands Home & Security, Inc . ( FBHS ) and Haverty Furniture Companies Inc. ( HVT ) both of which hold a Zacks Rank #1 (Strong Buy) and are expected to continue with their upbeat performance. Kirkland's Inc. ( KIRK ) carrying a Zacks Rank #2 (Buy) is also worth considering.

FORTUNE BRD H&S (FBHS): Free Stock Analysis Report

HAVERTY FURNIT (HVT): Free Stock Analysis Report

KIRKLANDS INC (KIRK): Free Stock Analysis Report

RESTORATION HDW (RH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: FBHS , HVT , KIRK , RH

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