Mar 31, 2020 (Market Realist via COMTEX) -- RH /zigman2/quotes/200286355/composite RH +0.17% stock fell close to 11% in extended trading on Monday. The stock fell after the company reported its earnings results for the fourth quarter of fiscal 2019, which ended on February 1. The company reported its results after the market closed.
On Monday, RH stock rose 6.4% and closed at $118.00. Based on the last closing price, the company has a market cap of $2.2 billion. The stock price has risen 46.7% in the trailing five-day period, while it has risen 14.6% in the trailing 12-month period.
Currently, RH stock is trading 54.0% below its 52-week high of $256.27 on February 19, 2020. The stock is also trading 61.3% above its 52-week low of $73.14 on March 23, 2020. On a year-to-date basis, the stock has fallen by 44.7% as of Monday.
RH's earnings in detail
RH posted revenues of $664.98 million in the fourth quarter, which fell by 0.9% YoY (year-over-year). The revenues missed analysts' estimate of $708.65 million. On an adjusted basis, the fourth-quarter revenues fell 1.0% YoY. The company highlighted that the revenue shortfall was due to higher-than-expected backorders and lower customer traffic during the fourth quarter. RH posted an adjusted EPS of $3.72, which rose by about 27% YoY and beat analysts' estimate of $3.59.
RH withdrew its outlook for fiscal 2020 amid the coronavirus outbreak. Wall Street analysts expect the company to post sales of $498.05 million in the first quarter of fiscal 2020. The figure would mark a fall of 16.8% YoY compared to $598.83 million in the first quarter of fiscal 2019. Also, analysts expect the company to post an adjusted EPS of $1.03 in the first quarter of fiscal 2020 compared to $1.97 in the same period last year. Analysts expect -3.3% and 8.3% growth in the company's fiscal 2020 and 2021 revenues, respectively. Meanwhile, they expect an adjusted EPS of $9.88 and $11.70 in fiscal 2020 and 2021, respectively.
Analysts' recommendations for RH stock
Currently, 19 Wall Street analysts cover RH stock. Eight analysts recommend a "buy," while 11 recommend a "hold." None of the analysts recommend a "sell."
Analysts have an average target price of $145.57 on RH stock. The target price implies a return of 23.3% based on the closing price of $118.00 on Monday. The consensus target price for the stock declined from $236.00 in February. The lowest target price estimate is $95, while the highest is $275.
On Tuesday, Barclays analyst Adrienne Yih reduced its target price on RH stock from $131 to $120. However, the analyst maintained her "overweight" rating on the stock. According to a report from TheFly , "COVID-19 is materially impacting fiscal 2020...Nonetheless, RH remains one of the premier brands in the home furnishings sector, with an aspirational positioning."
Cowen analyst Oliver Chen also reduced its target price on RH stock from $238 to $110. However, the analyst maintained his "market perform" rating on the stock. According to a report from TheFly , "As the galleries remain closed indefinitely, the company is driving some online sales. The company is cash preservation mode and cutting expenses where possible but expects to pay on its $300M convertible note in cash."
J.P. Morgan reduced its target price on RH stock from $140 to $135. However, Wells Fargo analyst Zachary Fadem increased its target price on the stock from $120 to $130 and maintained his "overweight" rating.
Home Depot /zigman2/quotes/208081807/composite HD +0.91% reported revenues of $25.78 billion, which implies a fall of 2.7% YoY. The company reported a non-GAAP EPS of $2.28 in the fourth quarter compared to $2.25 in the fourth quarter of 2018. Read Loop Capital Upgraded Home Depot Stock to a 'Buy' to learn more.
In the fourth quarter, Lowe's /zigman2/quotes/205563664/composite LOW +0.85% reported revenues of $16.0 billion, which implies a rise of 2.4% YoY. The company reported an adjusted EPS of $0.94 in the fourth quarter, which implies a rise of 17.5% YoY. Read Has Lowe's Stock Price Bottomed Out? to learn more.
Home Depot and Lowe's have average consensus target prices of $235.27 and $122.46, respectively. The figures suggest returns of 20.0% and 38.0%, respectively, over the next 12 months.
RH's stock returns
On Monday, RH stock was trading 3.1% below its 20-day moving average of $121.82. Meanwhile, the stock is trading 35.1% below its 50-day moving average of $181.71 and 39.4% below its 100-day moving average of $194.57. The stock's 14-day relative strength index score of 42 indicates that the stock isn't overbought or oversold.
RH has an upper Bollinger Band level of $189.82. The company's middle Bollinger Band level is $121.82, while its lower Bollinger Band level is $53.82. On Monday, the stock closed near its middle Bollinger Band level, which also indicates that the stock isn't overbought or oversold.
Currently, RH stock is trading at 11.94x its fiscal 2020 estimated EPS of $9.88. Meanwhile, the stock is trading at 10.08x its fiscal 2021 estimated EPS of $11.70. Wall Street analysts expect RH's earnings to rise at a CAGR of 20.7% over the next five years.
On Monday, the S&P 500 and the Dow Jones Industrial Average rose 3.4% and 3.2%, respectively. Read Will the Dow Jones Crash Create a Double Bottom? to learn more.