Home Depot (HD.US) shares offer limited upside potential as investors have already factored in the prospect of lower interest rates and a recovery in the housing market, RBC Capital Markets said in a note.
Noting that it will be looking for a “more attractive entry point,” the firm said the company’s current share price embeds comparable sales growth of flat to low single digits for 2024 and low- to- mid-single digits in 2025 against Home Depot’s own 2024 guidance of a 1% decline.
RBC is also now estimating a 1% decline in comparable sales, widening from a 0.3% decline previously, but raised its earnings per share estimate to $15.33 from $15.32 to account for an increase in gross margin.
RBC Capital maintained its sector perform rating on the stock while raising its price target to $377 from $299.