RH (RH) Stock Forecast & Price Target

RH is positioned for a positive fundamental inflection as RH Estates should add $85 million in 2H and could scale to $323 million in FY27, with demand expected to outpace delivered revenue and support roughly 9% company growth. Its recent 2Q results showed revenue of $922.2 million, up 2.6% year over year, while adjusted EBITDA margin beat expectations despite tariff and supply-chain noise, reinforcing the view that the business is emerging from a heavy investment cycle. Strong early traction at RH London, easing international SG&A drag, and a runway in a large luxury market all support margin expansion and market share gains into FY27.

RH is facing a difficult fundamental setup because the recent 2Q EBIT outperformance was inflated by a 590bps IEEPA refund benefit, while ex-refund EBIT margin fell to 7.2%, gross margin declined to 42.3%, and SG&A rose 16.6% Y/Y to 35.1% of sales. The outlook is also pressured by a higher cost environment that is expected to weigh on 2H margins, a delayed margin inflection as the investment cycle wraps, and execution risk around the Next Generation Design Galleries and trade program changes. On top of that, management faces macro sensitivity tied to wealthy consumers, housing trends, competition, and supply chain risk, with 86% of product imported by end of FY25 and more than 10% of sales still outside the core domestic business.