Plumbing & hardware business REH hit a fresh 52-week high this week as it continues to recover solidly aided by the potential end to the rate hiking cycle which theoretically should act as a tailwind for the stock. We continue to like REH over the medium-term with both Australia and the US needing new homes but we’re conscious that it’s already bounced strongly over the last 18 months with the stock not cheap trading on an Est. PE of 31.25x for FY23.
- We like REH short term looking for a test of $20, but the risk/reward is unappealing ahead of its earnings report on the 23rd.
- If the market reacts adversely to this month’s report we might consider the stock ~$17.50 depending on the composition of their results & outlook.
MM is cautiously bullish toward REH
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