Swiss National Bank Increases Holdings in RH as Home Furnishings Retailer Continues to Expand
May 15, 2023
Investing in the right stocks at the right time can be a challenge for any investor, whether institutional or individual. However, Swiss National Bank seems to have made a wise choice by increasing its holdings in RH during the fourth quarter of last year.
RH is a well-known retailer of home furnishings and operates with several subsidiaries across various categories including furniture, lighting, textiles, bathware, decor, outdoor and garden, child and teen furnishings through retail galleries and online platforms like rh.com, rhbabyandchild.com, rhteen.com, and rhmodern.com. It has evidently caught the attention of Swiss National Bank that decided to up its stakes by 1.7% during the quarter through buying an additional 800 shares.
The most recent Form 13F filing by Swiss National Bank with the Securities and Exchange Commission revealed that it now held 47,630 shares of RH stock. This amounts to roughly 0.20% ownership worth $12,726,000 as per their most recent filing.
A few months ago some brokerage firms expressed their skepticism about RH’s ability to sustain value and hit target price estimates set earlier this year. Morgan Stanley lowered its target price from $300 to $275 while maintaining an equal-weight rating on the stock back in March. Shortly after this rating drop also Banks of America reduced their price target from $338 to $315 emphasizing a downgrade of one notch from Buy straight into Neutral. Telsey Advisory Group also downgraded its market perform rating for RH from a previous buy at the start of this year all based on mixed expectations about future profitability given present trends.
Despite these concerns from certain brokerage analysts which resulted in StockNews giving a sell rating to RH’s shares shortly following their reduction RA’s stock presently holds consensus “hold” rating according to Bloomberg with its fair value slightly below target price estimates at around $281.50. It is worth noting that several analysts are optimistic and have issued buy ratings, while others believe continuing to hold is the best strategy over this period of regulatory turbulence.
Overall, RH’s financial performance depends on keeping up with changing trends in home decor and, critically, how well online retail can compete with traditional stores. As it continues share growth through physical and online store efforts its sales are expected to exceed 3 billion dollars within two years’ time as rebranding expands into affluent customers by focusing on products that improve both the visual elegance and comfort of people’s homes. With institutions like Swiss National Bank staying put on their investments into the company, it appears RH is solidifying its position in the industry despite recent volatility from analyst reactions to earnings reports.
Updated on: 16/05/2023
Debt to equity ratio: Strong Buy
Price to earnings ratio: Buy
Price to book ratio: Strong Buy
We did not find social sentiment data for this stock
|Analyst / firm||Rating|
Robert W. Baird
Loop Capital Markets
RH: A Rollercoaster Ride of Home Furnishings Success and Setbacks
RH: A Success Story in Home Furnishings Despite Recent Insider Trading and Disappointing Quarterly Earnings
Home furnishings retailer, RH (NYSE:RH), has been making headlines recently with updates on its current institutional investors and hedge funds holdings, insider trading activity, quarterly earnings report, and stock performance.
According to reports, Vanguard Group Inc. now owns over 1.8 million shares of RH valued at $457.6 million after purchasing an additional 98,713 shares in the last quarter; BlackRock Inc. now owns 1.6 million shares of the company’s stock valued at $403.3 million; Durable Capital Partners LP purchased an additional 17,196 shares in the last quarter for a total of 677,603 shares valued at $220.9 million; State Street Corp increased its stake in RH by purchasing an additional 45,954 shares valued at $123.6 million; finally, Pelham Capital Ltd. now owns over 450,000 shares worth around $120 million after purchasing an additional 16,728 shares in the last quarter.
While these figures suggest a positive outlook for RH stockholders owning up to almost 85% of the company’s stock altogether., current events have raised concerns with outsiders and experts alike.
One such event is recent insider trading as Director Hilary K Krane was reported to have sold off roughly $42K worth of stocks on February 27th for $306 per share during her position held within the company despite holding nearly six thousand other stocks personally which left some speculating about the future growth potential for RH despite its success thus far.
Additionally, while company executives remain optimistic about their position going forward despite rocky Q1 financials with revenue coming up short compared to analyst projections by over four hundred thousand dollars down from their end-of-year high netting over seven hundred seventy-two-and-a-half million dollars during this period – all while adjusting with COVID-related supply chain and inventory barriers that have affected all companies in today’s economy.
RH trades under the symbol NYSE: RH and opened at $259.73 as of May 15th, 2023 – bounced back from February lows near $207 per share to a high over $351 earlier last year, currently settling around $250 range over its 50-day simple moving average though analysts anticipate more resilience in Q2/Q3 with improved results through the rest of the year leaning hopefully on catalysts such back-to-school sales and seasonal marketing campaigns initiated by corporate executives.
However, despite recent concerns about declining net margins and returns on equity, along with reports about insider trading, RH remains a highly successful brand nationwide specializing in modern home décor for everyday consumers alongside whispers of heirloom riches for future generations – so maybe not all hope is lost yet. Only time will decide if RH can continue to impress their investors and enthusiasts alike in this volatile market climate.