What Analysts Think of Home Depot ahead of Its Q1 Results

Analysts’ recommendations

Of the 34 analysts covering Home Depot (HD), 67.6% have given it “buy” recommendations, while 32.4% have given it “holds.” On average, analysts’ 12-month price target for Home Depot is $205.86, which represents a potential upside of 7.4% from its price of $191.76 on May 15.

On May 15, Oppenheimer raised its price target on HD from $200 to $215. Morgan Stanley raised its price target from $200 to $210 on April 15. On May 7, RBC lowered its price target from $223 to $217.

What Analysts Think of Home Depot ahead of Its Q1 Results

Peer comparison

Of the 32 analysts following Lowe’s Companies (LOW), 68.8% have given it “buy” recommendations, while 32.2% have given it “holds.” Analysts have given LOW a 12-month price target of $118.17, which implies a potential upside of 9.8% from its current price of $107.62.

Of the 25 analysts covering Williams-Sonoma (WSM), 4.0% have given it “buy” recommendations, while 76% have given it “holds,” and the remaining 20% are recommending “sells.” Analysts’ 12-month price target for WSM stands at $56.41, which represents a potential upside of 6.0% from its current price of $53.20.

Among the 22 analysts covering Bed Bath & Beyond (BBBY), 9.1% have given it “buy” recommendations, while 72.7% have given it “holds,” and 18.2% have given it “sells.” The average 12-month target price of $17.87 for BBBY implies a potential upside of 17.2% from its current price of $15.25.

Valuation multiple

On May 15, Home Depot was trading at a forward PE multiple of 18.5x compared to 16.8x at the beginning of the year. The rise of 11.6% in Home Depot stock since the beginning of the year has resulted in a rise in its valuation multiple. In comparison, its peers Lowe’s, WSM, and BBBY were trading at forward PE multiples of 17.0x, 11.4x, and 7.6x, respectively.

Strong same-store sales growth and higher margins have allowed Home Depot to trade at a higher forward PE multiple than its peers.