There’s an Optimism about Home Depot ahead of 4Q16 Earnings

On February 13, 2017, Home Depot (HD) stock was trading at $139.87. That price may have already factored in the estimates we’ve looked at in this series. In this final part of the series, we’ll look at analysts’ recommendations and estimated target prices for the stock over the next 12 months.

The rise in the housing price index and an improvement in the US economy seem to have encouraged analysts to raise their price targets for Home Depot. As of February 13, 2017, analysts are expecting HD stock to reach $147.80 in the next 12 months. That’s a return potential of 5.7% from its current levels. Earlier, in November 2016, the company estimated that its next 12-month target price would be $147.20.

The 12-month target prices for Home Depot’s peers are as follows:

• Lowe’s (LOW): $80.60 with a return potential of 9.1%
• Bed Bath & Beyond (BBBY): $41.88 with a return potential of 4.3%
• Williams-Sonoma (WSM): $53.10 with a return potential of 12.7%

According to a Bloomberg survey of 32 analysts, 71.9% gave Home Depot a “buy” recommendation, and 28.1% gave it a “hold.” None of the analysts gave it a “sell” recommendation.

Home Depot’s share price moves in tandem with analysts’ recommendations. As analysts raise their 12-month target prices, HD stock should also rise, and vice versa.

Home Depot stock is trading lower than its target price. However, it doesn’t mean an automatic “buy.” Before investing, you should carefully analyze the factors we’ve covered in this series.