Jim Cramer’s Must-Watch List: 10 Stocks to Look After

8. RH (NYSE:RH)

Number of Hedge Fund Investors: 39

Jim Cramer discussed RH (NYSE:RH), formerly known as Restoration Hardware, noting its impressive 25% surge in a single day. Although recommending a stock with such a large daily gain isn’t his usual approach, Cramer made an exception for RH (NYSE:RH). He praised RH (NYSE:RH) for its remarkable performance and its leadership under Gary Friedman, who has transformed RH into a leading name in home furnishings.

“Here, it’s not my style to recommend a stock that’s up 25% in a single day, but if I were ever going to stick my neck out like that, I’d do it for RH, the old Restoration Hardware. It had a spectacular run today. This is an incredible retailer run by the iconic Gary Friedman, the impresario of what is suddenly the hottest store in home furnishings. How does he do it? Well, Gary’s a high roller when it comes to betting on himself…

Now, you may not want to buy the stock of anything that’s up 25% in one day, but everything related to housing is starting to take off. Just like RH, you have to buy early to get ahead of the turn when mortgage rates plummet, thanks to the Fed. As Gary told us in the conference call, I’m quoting: “We expect industry conditions to remain challenging, and as interest rates ease and the housing market begins to rebound, we expect our demand trends to accelerate throughout 2024 and 2025.””

RH (NYSE:RH) is an appealing investment due to its strategic efforts to become a leading luxury lifestyle brand. In Q2 2024, RH (NYSE:RH) reported a 3.6% increase in revenue to $829.66 million, surpassing expectations, and an EPS of $1.69, showing strong performance despite challenging market conditions. RH (NYSE:RH) is investing heavily in expanding its luxury offerings through Design Galleries and upscale experiences like restaurants and rooftop spaces, which set it apart from competitors.

RH (NYSE:RH)’s plans to open new luxury galleries in key markets, expand internationally, and explore luxury housing and travel further enhance its growth potential. Although recent stock fluctuations have been influenced by macroeconomic factors like the housing market and interest rates, analysts remain positive about RH (NYSE:RH)’s long-term prospects. RH (NYSE:RH)’s focus on high-end customer experiences and brand development makes it a strong candidate for future growth in the luxury home furnishings market.