M. Suhail
Intro
Home Depot (NYSE:HD) or The Home Depot, Inc. in full, was founded in 1978 and is the world’s largest home improvement retailer. HD operates over 2,300 stores across the United States, Canada and Mexico.
Despite operating
Home Depot Could Get Hammered: Pricey Stock And No Earnings Growth
Summary
- Home Depot's recent SRS Distribution acquisition expands its pro-contractor reach, but underlying earnings growth and operating performance remain weak.
- Comparable sales and customer transactions have stagnated or declined, with management guiding for only modest growth amid high interest rates and mortgage costs.
- Valuation multiples are historically high despite lackluster business momentum, rising debt, and inventory turnover concerns, exposing the stock to downside risk.
- Given limited upside, lofty valuation, and cyclical risks, I rate Home Depot a sell until a more attractive entry point emerges.
Always on the hunt for undervalued, promising stocks with a focus on risk and reward. Limited risks and decent to high upside by knowing what one's owning. I strongly believe that the best investment ideas are often the simplest. If contrarian, the better.
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