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Home Depot on the Street: Analysts’ Recommendations Before the 1Q17 Earnings

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HD’s target price

As of May 10, 2017, Home Depot (HD) was trading at $158.13. This stock price might have factored in the various estimates that we’ve already discussed in this series.

Notably, the recent rise in the housing price index, the increase in home sales, and the decline in unemployment all appear to have compelled analysts to raise their price targets for HD for the next 12 months.

As of May 10, 2017, analysts are expecting the company’s stock price to reach $159.21 in the next 12 months, which represents a return potential of 0.7%. Ahead of HD’s 1Q17 earnings, analysts had forecasted a price target of $147.8.

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

  • Lowe’s (LOW): $88.0 with a return potential of 2.3%
  • Bed Bath & Beyond (BBBY): $39.1, with a return potential of 3.7%
  • Williams-Sonoma (WSM): $51.79, which represents a fall of 5.1% from its current level
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Analysts’ recommendations

Of the 32 analysts covering Home Depot, 75% are recommending a “buy,” while the remaining 25% are recommending a “hold.” No one is recommending a “sell.” BTIG Research, which has “buy” rating for Home Depot, increased its target price from $155 to $175 on May 5, 2017.

Home Depot’s stock price moves in tandem with analysts’ recommendations. When analysts raise their target prices, the stock will likely move up, and the reverse can also be true. But just because HD’s current share price is lower than the analysts’ consensus target price, it doesn’t mean an automatic buy for the stock.

Investors have to analyze closely the various parameters that we’ve discussed in this series before making any investment decisions.

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