What Happened?
Shares of luxury furniture retailer RH (NYSE: RH) jumped 5.3% in the morning session after the stock extended its positive momentum as analysts at Citigroup raised their price target on the stock.
Citigroup boosted its price target on the luxury home furnishings company to $233.00 from $200.00, while maintaining a neutral rating on the shares. The positive sentiment also comes as the company makes a significant move in its European expansion strategy with the opening of a major flagship store, or gallery, in Paris. This new location is a key component of RH's plan to grow its presence on the continent, as it approaches market saturation in the U.S. The company has also indicated that additional galleries are scheduled to open in London and Milan within the next year.
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What Is The Market Telling Us
RH’s shares are extremely volatile and have had 38 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 dropped 7.1% on the news that President Donald Trump announced a planned 'major' tariff investigation on furniture imports.
The potential for new tariffs on imported goods sparked investor concern, leading to a sell-off in several furniture company stocks. RH, which relies on international manufacturing and sourcing, was among the hardest hit. Other companies in the sector, including Wayfair and Arhaus, also experienced significant declines. The threat of tariffs raises concerns about potentially higher costs for these companies, which could pressure profit margins or lead to increased prices for consumers.
RH is down 36.6% since the beginning of the year, and at $250.67 per share, it is trading 44.8% 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 $803.59.
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