Home Depot’s Investments, Share Gains Likely to Counter Choppy Macro Outlook, BofA Says
Home Depot’s (HD) strategic investments will likely back above-market growth, while the retailer is also well placed for continued share gains even amid macroeconomic softness, BofA Securities said Wednesday in a report. BofA kept its buy rating on Home Depot and raised the price target on the stock to $400 from $372. The company reported fiscal Q4 earnings Tuesday of $2.82 per diluted share, down from $3.30 a year earlier. Analysts polled by Capital IQ expected $2.78. Net sales fell to $34.8 billion from $35.8 billion. Analysts expected $34.7 billion. The retailer’s operating margin fell 135 basis points to 11.9% from a year earlier, compared with consensus forecasts of 11.8%, BofA said. That reflects a “pull forward of pricing actions ahead of cost decreases, and a 115 bps increase in opex as a percentage of sales reflecting sales deleverage and 2023 labor investments,” according to the report. BofA said it…