Just last week, we found out that home improvement stock Home Depot (HD) has a major potential win on its hands as its market share represented a major chunk of the home improvement market. But now, a slightly different study emerged that drives the point home even harder. It turns out that Americans are sitting on a whopping $35 trillion in home equity, and that could make for a major win for Home Depot. That was enough for investors, who sent Home Depot shares up nearly 1.5% in Monday afternoon’s trading.
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The report spelled it out: Americans currently are sitting on the highest level of home equity ever seen. While banks and mortgage originators were in line for big wins here, especially if interest rates start to drop again, there was also a titanic opportunity afoot for home improvement retailers. And since Home Depot controls a hefty portion of that market, that puts it right in line for a strong win. A win it will have to share with its competitors, certainly, but a win nonetheless.
A New Distribution Center Emerges
Meanwhile, remember when Home Depot announced plans to close a distribution center in Missouri? It turns out that it may have closed a door, but opened a window at the same time. Home Depot recently opened a new Stocking Distribution Center in Joliet, Illinois.
The new center will mean 200 new jobs for the region, and came with plenty of support from “…the state and the local community,” noted Mark Holifield, Home Depot’s Supply Chain senior vice president. The combination of the distribution center and the Rapid Deployment Center Home Depot reportedly has next door to it will offer Home Depot much more rapid restock and should also improve customer service.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on HD stock based on 18 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 3.78% rally in its share price over the past year, the average HD price target of $428.12 per share implies 12.77% upside potential.
