Loop Capital has maintained a Hold rating on Home Depot (NYSE: NYSE:HD) but raised the price target from $330.00 to $360.00.
The adjustment reflects a revised growth outlook for the recently acquired SRS Distribution, a roofing supply company.
Loop Capital's analysis includes the latest discussions with Home Depot's management and intra-quarter checks.
The firm's decision not to alter 2024 estimates for Home Depot's DIY chain comes after a lower than expected third-quarter guidance.
However, for 2025, the same-store sales (SSS) estimates have been revised from a 1% decline to a 2% increase. This change is based on the expectation that the interest rate cycle will improve, which could stimulate demand in the second half of 2025.
Additionally, the inclusion of SRS in Home Depot's future comparable sales reports is anticipated to support SSS growth.
Loop Capital's new forecast for 2025 implies a two-year comparable sales decrease of 1%, which is an improvement over this year's projected 6% decline on top of a flat performance in 2023.
The firm has also increased its revenue projections for Home Depot by $700 million in the second half of the fiscal year due to the SRS acquisition and recent market consolidations that are expected to contribute to growth.
The firm's earnings per share (EPS) estimate for 2025 is now $0.35, or approximately 2%, above the consensus.
InvestingPro Insights
As Loop Capital adjusts its stance on Home Depot (NYSE:HD), it's crucial to consider the company's financial health and market performance. According to InvestingPro data, Home Depot boasts a robust market capitalization of $379.45 billion and a Price/Earnings (P/E) ratio of 25.56, reflecting its strong position in the market. The company's revenue for the last twelve months as of Q2 2025 stands at $152.09 billion, with a Gross Profit Margin of 33.6%, indicating solid profitability.
From an investment standpoint, one of the InvestingPro Tips highlights that Home Depot has raised its dividend for 14 consecutive years, showcasing its commitment to returning value to shareholders. This is complemented by a dividend yield of 2.37% as of the end of August 2024, which may appeal to income-focused investors. Moreover, the company is trading near its 52-week high, at 96.26% of this peak, suggesting investor confidence in its performance.
For those considering Home Depot as an investment, it's worth noting that there are additional InvestingPro Tips available, providing deeper insights into the company's financial metrics and market standing. These tips may further inform investment decisions in the context of the company's long-term profitability and market trends.
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