RH "Tearing Down The Wall of Worry?" (Neutral) Lasser

研报英文原文证据摘录

RH "Tearing Down The Wall of Worry?" (Neutral) Lasser

balanced today. 01/27E

The key question emerging from the print: "is RH's outlook substantially From To % ch Cons.

de-risked?". Its guidance still assumes an acceleration of sales growth and Q1 (1.61) (1.90) NM (2.11)

profitability moving through the year. The co. pointed to +2.5pp contribution of Q2E 2.82 0.78 -72 1.94

Q3E 2.73 4.30 58 2.72

more new store growth, which seems reasonable as recent galleries ramp up. It

Q4E 2.50 3.28 31 2.73

also reflects a 4.5pp improvement as it works through its backlog. This is also

01/27E 6.45 6.59 2 5.41

somewhat understandable given the co. had to re-source certain goods due to the 01/28E 10.40 10.60 2 9.53

disruption of tariffs. But, it also reflects +5pp of benefit as the launch of RH Estates 01/29E 11.84 12.02 2 14.31

gains momentum. The timing and magnitude of this component will probably

remain up for debate. Especially amidst a choppy macro, we don't think the Michael Lasser

market will fully capitalize this just yet. Analyst

michael.lasser@ubs.com

Valuation may still not look extremely compelling at these levels. Making +1-212-713 2440

some below the line assumptions, we think the midpoint of RH's guidance Dan Silverstein

suggests slightly above $550m in EBITDA (Cons. $559m) and $6.40 of EPS. Even Analyst

assuming sell-side '26 EPS estimates head closer to $6.00 to $6.50 relative $5.15 daniel.silverstein@ubs.com

heading into the event, it would imply the stock was trading at a 25x-27x P/E as of +1-212-713 2459

the close. This compares to RH's 5-yr trailing NTM P/E of 21x, and 1-yr trailing P/E Mark Carden

of 17x. So, we don't think this setup will necessarily entice market participants that Analyst

were on the sidelines from a valuation perspective. mark.carden@ubs.com