Shares of RH Down Nearly 40%: Where Investors Can Turn To Now

Key Points

• Recent volatility in RH shares has caused some doubt around the retail sector, though that doesn't mean all peers must follow the path lower.
• Companies like Williams-Sonoma and Wayfair show some fundamental reasons to drive investors to them instead.
• A hedge against the fall in RH can work perfectly for those looking for a better risk-to-reward setup.

As President Trump announces the latest round of trade tariffs on the so-called “Liberation Day” of the U.S. economy, some traders may be surprised to see longtime favorites fall from grace. Yet this reaction aligns with a market gripped by extreme uncertainty. One retail name, in particular, is bearing the brunt—creating a different kind of opportunity.

This isn’t a “buy the dip” moment; in current conditions, that would resemble catching a falling knife. Case in point: shares of RH NYSE: RH plunged nearly 40% in a single day, marking some of the worst price action in its peer group and setting the stage for potential further fallout amid the tariff turbulence.

However, despite the bearish implications this situation may have brought to the industry, there are other stocks within it that could present a much better setup compared to RH stock. These stocks allow investors to align themselves with better safety and upside due to stability and underlying preferences shown in price action. This is where peers like Williams-Sonoma Inc. NYSE: WSM and Wayfair Inc. NYSE: W come in to aid struggling retail portfolios.

Why Did RH Suffer The Most?

As these tariffs target countries like Vietnam, China, and India, most (if not all) of the companies that import textiles and furnishings are set to suffer in the short term. These Asian nations are responsible for supplying either the raw materials or even the finished products to these brands in the United States.

Even private companies like Ikea illustrate the strain; if investors were to order certain products for shipping, unexpected delays could arise—an uncommon issue for a brand known for efficiency. It highlights how challenging supply chains may become in the near term.

However, some are better prepared for the future, which might be the choice to pass down added shipping and logistics costs to underlying consumers. This is why RH was the worst performer in the group, considering that Williams-Sonoma and Wayfair fell by less than half of what RH experienced the day after the tariff announcement.

Remove Ads

With this in mind, those looking to benefit from the competitive environment these tariffs are creating should consider Wayfair and Williams-Sonoma moving forward.

Premium Products Help Williams-Sonoma’s Future

Unlike RH, which targets affluent consumers with high-end, luxury home furnishings, Williams-Sonoma serves a broader customer base across both mid-market and premium segments. This diversified positioning can make Williams-Sonoma less volatile and more resilient during economic downturns.

More than that, the recent company financials show that Williams-Sonoma had been preparing in accordance with tariff expectations, as over $230 million worth of inventory had been bought over the past quarter, potentially securing these lower-cost units ahead of time of supply shocks.

Because of these two factors, Investors can notice that analysts from Jefferies Financial Group decided to reiterate their Buy rating on the stock as of late March 2025, this time also keeping a valuation target of as much as $208 per share. Williams-Sonoma has outperformed RH stock’s fall and now implies a net upside of 50% from today’s prices.

Other analyst consensus, such as upcoming earnings per share (EPS), might also be useful to investors. Knowing that analysts now expect Williams-Sonoma to report up to $3.64 in EPS for the fourth quarter of 2025, the double-digit percentage growth from today’s $3.28 in reported EPS allows the stock to fulfill this upside view.

A Nimble Business Enables Wayfair to Outperform

Selling off far less than RH and Williams-Sonoma, Wayfair’s relative strength may raise eyebrows. Simply put, its e-commerce model eliminates many of the overhead costs tied to operating brick-and-mortar businesses like RH or Williams-Sonoma.

Because of this fundamental setup, the company is able to create enough doubt among short sellers today, as can be seen in the 3.5% decline in short interest over the past month alone. This is a clear sign of bearish capitulation or even disappointment when realizing Wayfair might be best prepared to weather these tariffs.

All told, Wall Street analysts must have a reason to keep a $56.8 consensus price target on Wayfair stock today. This target calls for as much as 126.8% upside from where it trades today, creating a fantastic risk-to-reward profile for investors looking to take advantage of this recent trade tariff uncertainty.