HD’s target price
On January 17, 2018, Home Depot (HD) was trading at $199.82. On the same day, analysts were expecting its stock price to reach $199.68 in the next 12 months.
On January 17, 2018, Morgan Stanley raised its target price from $185 to $210. Previously, Raymond James had raised its target price from $200 to $215, while Deutsche Bank had raised its target price from $200 to $227, and Barclays had raised its target price from $165 to $230.
The expectation of growth in Home Depot’s EPS (earnings per share) due to the lower effective tax rate and the increase in sales due to improving macroeconomic factors could have prompted analysts to raise their target prices.
The target prices and return potentials of Home Depot are as follows:
- Lowe’s Companies (LOW): $97.90, which represents a fall of 3.7% from its current price of $101.68
- Williams-Sonoma (WSM): $50.95, which represents a fall of 6.3% from its current stock price of $54.39
- Bed Bath & Beyond (BBBY): $23.0, which represents a fall of 1.7% from its current stock price of $23.40
Of the 36 analysts that follow Home Depot, 77.8% recommend a “buy,” while 22.2% recommend a “hold.” None of the analysts recommends a “sell.”
Remember, Home Depot’s stock price moves in tandem with these analysts’ ratings. Currently, Home Depot is trading above the analysts’ 12-month target price, but this doesn’t mean an automatic “sell.” Investors are typically advised to analyze the analysts’ estimates before making any investment decisions.
Continue to the next and final part of this series for a look at Home Depot’s valuation multiple.