01:38 PM EST, 01/06/2025 (MT Newswires) -- RH's (RH) demand growth is likely to accelerate into 2025 and stay strong in 2026, fueled by new product launches and store openings as well as positive international results and a brand extension expected to generate over $1 billion in sales, Wedbush said in a note Monday.

"While we see a mixed backdrop for the industry in 2025 as we outlined in our industry outlook, we believe that RH can outperform without an improvement in housing, but such an improvement would serve to accelerate the company's growth," Wedbush said in the note.

For 2025, the firm forecasts a 14.2% year-over-year sales increase, in line with consensus, and earnings per share of $13.05 compared with consensus' $12.90. Wedbush also said RH is expected to return to positive free cash flow and reduce leverage, easing balance sheet concerns.

Wedbush said it is adding RH to its "Best Ideas List" due to its strong growth prospects and that RH is its preferred name in home furnishings retail.

Wedbush maintained its outperform rating on RH with a price target of $500.

Shares of RH were up 2.5% in recent Monday trading.

Price: 415.52, Change: +10.06, Percent Change: +2.48