J.P. Morgan Securities and Cowen and Company cut their price targets
RH (NYSE: RH), formerly known as Restoration Hardware, is down 11.8% to trade at $104 this morning. The company reported fourth-quarter profits of $3.72 per share, higher than Wall Street's estimated $3.59 per share. Despite this, the revenue announced by the retailer was lower than anticipated, coming in at $664.98 million, the firm citing weak traffic in its stores and a high rate of back-ordered product. So far two analysts have cut their price targets, one of which, J.P. Morgan Securities, for the second time this week, and the other, Cowen and Company, to $110 from $238.
On the charts, RH recently ran into overhead pressure at the 20-day moving average, and is now walking a thing line at the $100 floor. Longer-term, the equity is down 44.7% year-to-date.
Sentiment over RH has been split, with eight out of 16 analysts in coverage sporting a "strong buy," and the other eight a cool "hold." Meanwhile, the stock's average 12-month price target of $145.57 is a 23.4% premium to current levels.
In the last 10 weeks, 1.68 calls have been bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This sits higher than 85% of readings from the past year, suggesting that calls rarely outweigh puts to this extent.
RH's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 87 out of 100. This indicates that the security has tended to exceed options trader's volatility expectations during the past year.