Barclays analyst Seth Sigman upgraded The Home Depot Inc (NYSE:HD) to Overweight from Equal-Weight at an increased price target of $372 from $325.
The analyst is bullish on increased exposure to housing and potentially strengthening home prices as rates reverse.
Sigman notes stabilizing sales and a return to normal algorithmic-like growth in 2025 would support the stock.
The analyst expects comps to remain weak in low-single-digits in the near term but stabilize through 2024.
The analyst expects gross margin to be relatively stable, while SG&A is projected to benefit from $500 million of fixed cost reductions and cycling incremental costs in 2023.
The analyst estimates FY24 EPS of $15.47 (vs. consensus $15.62), thanks to comps and SG&A rate.
The analyst models comps down slightly vs. consensus flat, including negative in H1, with a slight improvement in H2, partially offset by an extra week (estimates ~$2.5 billion in sales).
The analyst raised FY25 EPS estimates slightly to $16.61 (up from $16.54), in line with the consensus.