Home Depot (HD) PT Raised to $350 at UBS Following Meetings; Operating at 'High Level'

April 14, 2021 8:15 AM EDT
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Price: $325.42 +2.66%

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UBS analyst Michael Lasser raised the price target on Home Depot (NYSE: HD) to $350.00 (from $305.00) while maintaining a Buy rating following meetings with management. Lasser said the key takeaway is that the company is operating at a high level right now.

The analyst commented, "The central takeaway from our convo. w. HD’s CEO, CFO & EVP of stores was that the retailer is operating at a high level right now. Concurrently, its executing its plan to be even better positioned for the future. Its One Home Depot strategy of investing in its stores, supply chain & omnichannel is producing steady returns. In fact, HD believes it gained $10b of incremental sales as a result of these initiatives. Assuming that this has translated to an incremental FCF of $1.5b means that it's seen a handsome return on the $5b that it's invested. At the same time, the macro is favorable. Consumers have a heightened interest in the home. Plus, millennials are entering their peak home owning years. Lastly, the overall home ownership rate has climbed to 65.8%, the highest level since ‘11. Looking forward, HD is confident that it can continue to outperform the overall market. This should translate to steady & consistent gains for shareholders."

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