Wolfe Research Maintains Outperform Rating on Home Depot (HD), Trims PT

Wolfe Research revised its outlook on Home Depot, Inc. (NYSE:HD) on Wednesday, lowering the price target to $392 from $401 while maintaining an Outperform rating on the stock.

The firm continues to back the retail giant’s position within the broader home improvement sector, even as macroeconomic headwinds persist. Analysts at Wolfe cited home improvement’s relative resilience compared to homebuilding, despite softening remodeling demand and the lingering effects of inflation. They acknowledged that a dip in comparable sales is a risk, but believe it is already factored into the current share price.

Why Wolfe’s Still Bullish on Home Depot (HD), Despite the PT Trim

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A key concern remains the impact of sluggish existing home sales on renovation activity. Elevated interest rates have cooled housing turnover, typically a major driver of remodeling. Still, Wolfe maintains that Home Depot’s scale and customer base place it in a strong position as conditions stabilize. Wolfe adjusted its earnings per share (EPS) forecasts, now expecting $14.93 for fiscal 2024 (down from $15.21) and $15.38 for 2025 (down from $16.19).

These estimates are consistent with market consensus. The new $392 price target reflects a 25.5x multiple on 2025 projected EPS, suggesting optimism around a gradual recovery in demand. Currently, Home Depot, Inc. (NYSE:HD) trades at roughly 22x next-twelve-month earnings, higher than its 10-year average of 21x. Despite trimmed projections, Wolfe’s stance underscores continued confidence in Home Depot’s ability to outperform over the long term, especially as industry conditions improve.

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