Hedgeye Retail Sector Head Brian McGough reports that a sell-side firm just initiated coverage on Restoration Hardware (RH) today with a Sell rating. "That's a head-scratcher" he says.
In an emailed note McGough writes, "It’s tough to find any logic whatsoever in a short call on RH when the company will see 30%+ acceleration in square footage growth AND outsized comp growth to boot. This is Retail 101. Our estimates across durations remain 2-3x consensus."
Bottom line according to McGough is "RH is a $175 stock waiting to happen."
Check out the HedgeyeTV video below from October 17th where McGough explains why he believes RH is a 3-bagger.
(Note: McGough recently issued a 50-page Black Book on Restoration Hardware detailing his thesis. Ping sales@hedgeye.com for more information).