J.P. Morgan analyst Christopher Horvers has maintained their bullish stance on HD stock, giving a Buy rating today.
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Christopher Horvers has given his Buy rating due to a combination of factors that suggest a positive outlook for Home Depot. The company is expected to benefit from an improvement in industry demand, driven by low growth in the existing home sales market and current mortgage rates, which could lead to increased replacement demand and slight inflationary pressures. Additionally, Home Depot’s strategic investments in its Pro Ecosystem and supply chain are anticipated to position it well for capturing a larger share of the market, particularly in the complex order and Pro-planned purchase segments.
Furthermore, Home Depot’s long-term growth algorithm, which projects 3-4% top-line growth and operating margin expansion, appears conservative given historical market growth and the company’s potential for share gains. The company’s focus on cost savings and operational efficiency, including $500 million in net cost reductions, also provides margin optionality. Despite challenges such as margin compression and ROIC dilution, the expectation is that these pressures are bottoming out, and Home Depot is poised to capitalize on its strategic initiatives as the business scales.
Horvers covers the Consumer Cyclical sector, focusing on stocks such as Home Depot, AutoZone, and Lowe’s. According to TipRanks, Horvers has an average return of 9.0% and a 60.78% success rate on recommended stocks.
In another report released today, UBS also maintained a Buy rating on the stock with a $445.00 price target.