That's right, Home Freakin Depot. Private investors are thinking of buying a Dow component. Dear lord! And it's one of the real ones, not Alcoa (NYSE:AA).
In my mind, Home Depot is still cheap. The earnings have been disappointing, but nothing horrible. HD is going to make about $6 billion this year. It pays a good dividend (raised by 50% twice this year), and the company is working to alter its business model.
The question we have to ask is if HD can change from a company that grew 18% a year to a company that will grow by 10%-12% a year. I think Nardelli realizes the problems HD faces.
The Home Depot expects 12% sales growth next year, and EPS growth of 4%-5%. But then what?