CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lift our 12-month target price to $327 from $311, 21x our FY 24 EPS (Jan.) of $15.56, cut from $15.94. Our multiple is a premium to the 10-year forward P/E average of 20.6x, warranted by being closer to the start of rate cuts, but offset by the 2024 remodeling contractions projected by the Leading Indicator of Remodeling Activity. We anticipate FY 24 guidance will land below The Home Depot, Inc. (NYSE: HD) ‘s market stability model across all metrics. Looking at history as a guide, we view the shares as trading at a high premium compared to the previous rate hike cycle peak in 2018-2019. We also do not believe the premium is justified by HD’s total addressable market expansion announced at the last investor and analyst conference, as it will take time to roll out needed initiatives. Additionally, resale activity projections in 2024 are not meaningful enough and could warrant call-downs as economic strength keeps materializing, encouraging the “higher for longer” narrative. Lastly, the pull-forward of revenue remains a concern.