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What Are Analysts Recommending for Home Improvement Companies?

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Feb. 6 2018, Published 9:43 a.m. ET

Home Depot

Home Depot (HD) is the most favored stock among home improvement companies with 77.8% of the 36 analysts favoring “buy” recommendations, and the remaining 22.2% favoring “hold” recommendations. None of the analysts are recommending a “sell.” Despite the recent fall in its stock price, analysts are expecting Home Depot’s stock price to reach $210.45 in the next 12 months, which represents a return potential of 14.9%.

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Lowe’s Companies

Of the 33 analysts that follow Lowe’s (LOW), 72.7% are recommending a “buy,” and the remaining 27.3% are recommending a “hold.” In the next 12 months, analysts are expecting the stock price of Lowe’s to reach $108.30, which represents a return potential of 11.0%.

Williams-Sonoma

Of the 27 analysts that follow Williams-Sonoma (WSM), 18.5% are recommending a “buy,” 63.0% are recommending a “hold,” and 18.5% are recommending a “sell” option. Analysts are expecting Williams-Sonoma’s stock price to reach $50.65 in the next 12 months, which represents a return potential of 3.1%.

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Bed Bath & Beyond

Of the 24 analysts that follow Bed Bath & Beyond (BBBY), 4.2% are recommending a “buy,” 62.5% are recommending a “hold,” and 33.3% are recommending a “sell.” In the next 12 months, analysts are expecting the stock price of Bed Bath & Beyond to rise 11.3%.

Valuation multiple

As of February 5, 2018, Home Depot, Lowe’s Companies, Williams-Sonoma, and Bed Bath & Beyond were trading at a forward PE (price-to-earnings) multiple of 20.2x, 17.1x, 12.2x, and 7.3x, respectively. As the largest retailer in the world, Home Depot enjoys higher margins, which along with higher SSSG (same-store sales growth), has allowed the company to trade at a higher valuation multiple than its peers.

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