It’s trouble for upscale home goods retailer RH (NYSE:RH) as a major investor decided to haul stakes and head for the sunset. That investor is none other than Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B), and when the Oracle of Omaha sells out, there’s not much reason for anyone else to stick around. That’s likely why RH fell 8.75% in Tuesday’s trading.
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Berkshire Hathaway has been in the RH game for quite some time, too; it set up said stake back in 2019 and added to it in 2022. Ultimately, Berkshire’s stake in RH reached 2.36 million shares worth a combined total of $630.6 million. Now, that stake no longer exists, and there’s a whole bale of RH stock floating around. The reason why Berkshire got in is clear enough; RH saw explosive gains during the pandemic as huge numbers of people redecorated their homes while they were mostly stuck in them by federal mandate.
But now, it’s a fairly different matter. With an economic downturn likely, and the consumer increasingly tapped out, the likelihood of big sales of fancy home furnishings drops through the floor. RH wasn’t the only one to see a departure of Berkshire investment, either; Berkshire also bailed on Taiwan Semiconductor (NYSE:TSM), U.S. Bancorp (NYSE:USB), and Bank of New York Mellon (NYSE:BK). Meanwhile, several other firms saw Berkshire pull back somewhat, though not skip out altogether.
Currently, analyst consensus calls RH stock a Moderate Buy based on Seven Buy ratings, seven Holds, and one Sell. Further, with an average price target of $272.80, RH offers those who stick around 12.89% upside potential.
