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RH (RH) Stock Jumps 11.5%: Will It Continue to Soar?

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RH (RH - Free Report) shares ended the last trading session 11.5% higher at $282.56. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.6% gain over the past four weeks.

RH as well as other housing market-related stocks rallied as a slowdown in the pace of inflation raised hopes that the Federal Reserve may start reverse the pace of its interest-rate hikes.

This furniture and housewares company is expected to post quarterly earnings of $4.77 per share in its upcoming report, which represents a year-over-year change of -32.2%. Revenues are expected to be $840.81 million, down 16.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For RH, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

RH belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Krispy Kreme (DNUT - Free Report) , closed the last trading session 0.4% higher at $14.22. Over the past month, DNUT has returned 11%.

For Krispy Kreme, the consensus EPS estimate for the upcoming report has changed -8.8% over the past month to $0.05. This represents a change of -16.7% from what the company reported a year ago. Krispy Kreme currently has a Zacks Rank of #4 (Sell).


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