What Happened?
Shares of luxury furniture retailer RH (NYSE: RH) jumped 3.6% in the afternoon session after an analyst at Morgan Stanley raised the price target for the company's shares to $275 from $250, while keeping an "Overweight" rating. This adjustment represented a 10% increase in the price target, signaling a positive outlook on the stock's value.
The shares closed the day at $232.90, up 4.2% from previous close.
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What Is The Market Telling Us
RH’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 5.3% on the news that the White House announced a one-year delay on planned tariff hikes for many home goods, including furniture and cabinets.
The decision kept the current 25% tariff rate in place, averting a scheduled increase to as high as 50% for items like kitchen cabinets and bathroom vanities that was set to take effect on New Year's Day. This move provided significant relief for retailers, as higher tariffs typically lead to increased costs. Companies would have faced the difficult choice of absorbing the extra expense, which hurts profitability, or passing it on to customers through higher prices, which could reduce sales. The news was met with investor optimism, sparking a rally in the sector.
RH is up 20.4% since the beginning of the year, but at $232.90 per share, it is still trading 48.8% below its 52-week high of $454.52 from January 2025. Investors who bought $1,000 worth of RH’s shares 5 years ago would now be looking at an investment worth $464.88.
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