RH Stock Sees Slew Of Downgrades, Price Target Cuts From Wall Street As Trump Tariffs Bite

RH shares experienced multiple price target cuts and downgrades from Wall Street analysts on Friday due to the greater impact of the Trump administration’s tariffs on global trading partners, which affected the company.

Telsey Advisory downgraded RH to ‘Market Perform’ from ‘Outperform’ and revised the price target to $220, down from $255. The firm cited that the downgrade was mainly due to the reduced revenue and profit outlook, primarily resulting from a delay in a Sourcebook mailing and incremental costs incurred as a result of recently enacted tariffs.

Retail sentiment on RH improved to ‘extremely bullish’ from ‘bullish’ territory a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Telsey noted that if an additional sector tariff on furniture is imposed, RH has the highest exposure within the home furnishings coverage group due to a high percentage of sales from furniture and less sourcing in the U.S., which is just about 10%.

The retail user message count on RH increased by around 1,800% on Stocktwits in the last 24 hours. Shares of RH were down 3% in early trading after the company's second-quarter results missed analysts’ estimates and its annual sales forecast was lowered.

Barclays lowered its price target on RH to $385 from $436 and maintained an ‘Overweight’ rating, according to TheFly. The firm reduced its estimates after the fiscal second-quarter report, citing tariffs, but noted that the core RH story "seems to be intact."

Stifel analyst W. Andrew Carter cut the firm’s price target on the stock to $320 from $390 and maintained a ‘Buy’ rating. However, he said that the "fundamental/valuation mismatch" keeps the firm's constructive approach intact, as second-half revenue growth is slowing, but still suggests mid-single to high-single-digit underlying revenue growth.

RH CEO Gary Friedman stated that the company absorbed a significantly smaller hit on tariffs in the current quarter; however, the tariffs will really start to take effect in the third quarter, fourth quarter, and into next year.

However, TD Cowen raised the firm's price target on RH to $265 from $235 and maintained a ‘Buy’ rating. The firm said it likes RH's sales setup and thinks the lowered guidance is achievable.

Shares of RH have declined by nearly 44% this year and have fallen by 31% over the last 12 months.

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