CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price of $338, up $11, is 22x our FY 25 (Jan.) EPS of $15.36 (down $0.20; FY 26 started at $16.55), a premium to the 10-year forward P/E of 20.6x. FQ4 (Jan.) EPS of $2.82 (-15% Y/Y) beat by $0.05 on revenue of $34.8B (-3% Y/Y), $110M above consensus. Comparable sales declined 3.5% on lower transactions (-2% Y/Y) and lower average tickets (-1% Y/Y). Pro and Do-It-Yourself segment performance was even relative to each other. Big-ticket transactions declined 6.9% Y/Y. HD guides to 1% sales growth and 1% comp. sale decline with a 53rd week lifting sales by $2.3B in FY 24. Comp sales are projected to outperform the low-single-digit industry decline warranting our P/E. EBIT margin guide of 14.1% (-10 BPS Y/Y) yields 1% Y/Y EPS growth. Execution of capabilities targeting the Pro consumer will be a key focus. We expect pull-forward headwinds, while high cost of debt could pressure home equity access. In our view, this will limit EBIT growth to a level below what is currently priced into shares.