Home Depot: Too Pricey With A Tough Consumer Backdrop (Rating Downgrade)


  • A sluggish residential real estate market affects major home-improvement retailers and homeowners’ intentions to invest in big-project upgrades.
  • Home Depot’s Q1 revenue missed expectations, but management reiterated FY 2024 guidance.
  • A delayed spring selling season was cited for the mixed start to the year.
  • HD’s valuation is not all that compelling, but the company remains a free cash flow generator with an above-market dividend yield.
  • I highlight key price levels to watch on the chart following a steep pullback from its March high.

Facade of the store with the inscription "The Home Depot" in the suburbs of Phoenix, Arizona USA

Oleg Kovtun/iStock Editorial via Getty Images

A sluggish residential real estate market from the perspective of transaction volume and folks moving about the country emerges as a bearish trend for major home-improvement retailers. Homeowners spent excess savings from the pandemic

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Leave a Reply

Your email address will not be published. Required fields are marked *