Home Depot: Strong Scale Advantage, But The Valuation Is Not Attractive

Summary:

  • I give a neutral rating due to its valuation being above its historical average, which may lead to a price correction.
  • Home Depot’s scale advantage, extensive store network, and buying power give it a competitive edge in the home improvement industry.
  • A weak macro environment presents an opportunity for HD to consolidate market share from smaller competitors.
  • There is room for margin improvement through technological enhancements and increased control over appliance installation.

Home Depot Raises Its Minimum Wage For Workers

Justin Sullivan

Overview

My recommendation Home Depot, Inc. (NYSE:HD) has a neutral rating as I expect valuation to revert back to its historical average, which is a headwind to total returns. I like HD’s business because of its scale, competitive advantage, and ability


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