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The Home Depot Inc HD

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Stock XNYS Rating as of
$346.43 −1.01 (0.29%)
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Company Report

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Wide-Moat Home Depot's Competitive Edge Remains Intact Despite Tumultuous Macro Environment

Jaime M Katz, Grace Na

Home Depot is the world's largest home improvement retailer, delivering $153 billion in revenue in 2023. The firm's wide economic moat rating is based on its economies of scale and brand equity. While Home Depot has realized strong historical returns as a result of its scale, operational excellence and concise merchandising remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm's brand intangible asset, with faster time to delivery improving the do-it-yourself (DIY) experience and market delivery centers catering to the pro business. The success of ongoing initiatives should allow for modest operating margin expansion above prepandemic levels in the longer term, despite near-term inflationary pressures and economic turbulence.

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Price vs Fair Value

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HD is trading at a 568% premium.
Price
$346.43
Fair Value
$699.00
Uncertainty
Medium
1-Star Price
$345.78
5-Star Price
$661.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Home Depot's continued investments in supply chain and merchandising should improve productivity and support its market leadership position in the home improvement market.

Bears

Weak consumer spending, higher interest rates, or an economic downturn could hinder sales for home improvement projects and affect Home Depot's growth.

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Trading Information

Previous Close Price
$347.44
Day Range
$344.70–349.81
52-Week Range
$274.26–396.87
Bid/Ask
$346.02 / $346.28
Market Cap
$343.32 Bil
Volume/Avg
3.4 Mil / 3.5 Mil

Key Statistics

Price/Earnings (Normalized)
22.24
Price/Sales
2.27
Dividend Yield (Trailing)
2.45%
Dividend Yield (Forward)
2.59%
Total Yield
4.68%

Company Profile

Home Depot is the world's largest home improvement specialty retailer, operating more than 2,300 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the United States, Canada, and Mexico. Its stores offer numerous building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair, and operations business, which has been expanded through the tie-up with HD Supply (2020). Moreover, the additions of the Company Store brought textile exposure to the lineup, while Redi Carpet added multifamily flooring.
Sector
Consumer Cyclical
Industry
Home Improvement Retail
Stock Style Box
Large Core
Total Number of Employees
471,600
Website
https://www.homedepot.com

Competitors

Valuation

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Metric
HD
TSCO
TGT
Price/Earnings (Normalized)
 22.2427.1517.87
Price/Book Value
 329.1713.705.49
Price/Sales
 2.272.010.69
Price/Cash Flow
 18.1919.609.74
Price/Earnings
HD
TSCO
TGT

Financial Strength

Metric
HD
TSCO
TGT
Quick Ratio
 0.320.100.27
Current Ratio
 1.351.400.91
Interest Coverage
 11.1632.7511.55
Quick Ratio
HD
TSCO
TGT

Profitability

Metric
HD
TSCO
TGT
Return on Assets (Normalized)
 20.23%12.33%8.02%
Return on Equity (Normalized)
 1,345.87%54.41%35.66%
Return on Invested Capital (Normalized)
 32.69%16.64%15.13%
Return on Assets
HD
TSCO
TGT
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Home Improvement Retail Industry Comparables

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Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
LOW
Lowe's Companies IncYjnrbzcwfMqhc$134.5 Bil
WFAFY
Wesfarmers Ltd ADR—Gmxl$51.0 Bil
WFAFF
Wesfarmers Ltd—Cxcw$51.0 Bil
FND
Floor & Decor Holdings Inc Class A—Ghlbvx$12.8 Bil
KGFHY
Kingfisher PLC ADRQyzrzzllmSlhdw$6.1 Bil
KGFHF
Kingfisher PLC—Mrw$6.0 Bil
HPCRF
Home Product Center PCL Shs Foreign registered—Znxkgv$3.6 Bil
ARHS
Arhaus Inc Class A—Hdvb$2.3 Bil
FKRAF
Fiskars Oyj—Smhz$1.5 Bil

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