Jim Cramer’s Ultimate Stock Picks: 10 Hot Stocks to Consider

8. RH (NYSE:RH) 

Number of Hedge Fund Investors: 39

Jim Cramer highlights that RH (NYSE:RH), known for its luxury home furnishings, has had an impressive quarter, with its shares rising nearly 20%. RH (NYSE:RH) reported better-than-expected revenues, earnings per share, and profit margins. Executives also forecast that demand will grow faster through the end of this year and into 2025. According to Cramer, RH (NYSE:RH) stands to gain from increased housing sector activity driven by lower interest rates.

“RH is back with a great quarter. Shares are jumping nearly 20%. The maker of luxury home furnishings reported better-than-expected revenues, earnings per share and margins. Notably, executives said demand trends are expected to accelerate throughout the rest of the year and into 2025. This is another stock that benefits from more activity in the housing sector spurred by lower rates.”

RH (NYSE:RH) is an attractive investment due to its strong recent performance, focus on the luxury market, and positive future outlook. In Q2 2024, RH (NYSE:RH) reported earnings per share (EPS) of $1.69 and revenue of $829.66 million, surpassing analyst expectations and showing a 3.6% increase from the previous year. This performance highlights RH (NYSE:RH)’s resilience amid economic challenges.

RH (NYSE:RH)’s focus on high-end luxury home furnishings gives it a competitive edge, as this market is less affected by economic fluctuations, providing stability against inflation and higher interest rates. RH (NYSE:RH)’s premium positioning allows it to maintain strong profit margins despite broader economic pressures. Analysts are optimistic, with Citigroup raising its price target to $355, citing strong demand and effective operations.

Baron Discovery Fund stated the following regarding RH (NYSE:RH) in its first quarter 2024 investor letter:

“During the quarter, we added to our position in RH (NYSE:RH), a high-end retailer of home furnishings and furniture that has a unique vision to transform from a domestic furniture company to a global luxury brand. Shares were pressured in the earlier part of the quarter due to shorter-term concerns regarding demand amid a volatile macroeconomic environment.

Despite these short-term pressures, we remain confident in RH’s ability to gain market share in the fragmented high-end furnishings market, and we see a multi-year growth pipeline driven by store expansion around the globe. We also believe that RH will see improvements in profitability as the brand returns to a fuller-priced sales environment, and as it begins to scale its early international investments.”