HD

Home Depot, Inc.

Consumer


Presented:01/17/2023
Price:$323.69
Cap:$329.90B
Current Price:$415.58
Cap:$412.79B

Presented

Date01/17/2023
Price$323.69
Market Cap$329.90B
Ent Value$352.77B
P/E Ratio19.51x
Book Value$1.27
Div Yield2.35%
Shares O/S1,019.19M
Ave Daily Vol4,047,372
Short Int1.30%

Current

Price$415.58
Market Cap$412.79B
The Home Depot, Inc. engages in the sale of building materials and home improvement products. Its products include building materials, home improvement products, lawn and garden products and decor products. The firm operates through the following geographical segments: U.S., Canada and Mexico. It offers home improvement installation services, and tool and equipment rental. The company was founded by Bernard Marcus, Arthur M. Blank, Kenneth Gerald Langone and Pat Farrah on June 29, 1978, and is headquartered at Atlanta, GA.

Publicly traded companies mentioned herein: Home Depot Inc/The (HD)

Highlights

The presenter is short shares of The Home Depot Inc (HD) based on an earnings normalization from pricing weakness and macroeconomic headwinds. Inflation has continued to drive average ticket increases, which was up 8.8% YoY in fiscal Q3’23 (fiscal year 2023 ends Jan. 31). The strong average ticket increases coincided with similarly impressive transaction growth in fiscal year 2021 as consumers worked on their homes. Transactions have declined YoY each of the last 6 quarters, likely evidence of the pull-forward of demand that took place in prior quarters. Many investors believe prices will never fall, but some level of normalization seems obvious to the presenter given the increases that have taken place and worsening consumer confidence. He therefore has a $200 price target over the next two years, and while pricing pressure is needed for his short thesis to work, he takes solace in his view that at $330, there is a lack of upside. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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