Staying The Course With The Home Depot

Summary:

  • Despite The Home Depot’s acquisition of SRS Distribution, mixed financial results and market weaknesses justify maintaining a “hold” rating.
  • Recent data shows a 0.7% revenue decline, driven by lower comparable sales, transactions, and average ticket prices.
  • Increased SG&A costs and declining profitability metrics, including net income and operating cash flow, further support a cautious stance.
  • Economic conditions and housing market trends suggest additional weakening, making it prudent to remain neutral on Home Depot’s stock.

People shopping at The Home Depot in San Francisco bay area

Sundry Photography

Back in late March of this year, one company that I had decided to downgrade was home improvement giant The Home Depot, Inc. (NYSE:HD). Since October 2022, I had been bullish on the firm. And the returns


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.

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