- HD Supply (HDS -5.7%) extends yesterday's 18% plunge that followed its Q1 earnings miss, weak Q2 guidance and the $2.5B sale of its Waterworks business unit.
- HDS is hit today with at least three analyst downgrades; Baird cuts shares to Neutral from Outperform with a $37 price target, down from $47, citing disappointing guidance in a "show me" quarter, with accelerated investment spending driving further uncertainty.
- Baird says catalysts have burned off, competitive and margin fears are rising, and valuation does not appear inexpensive; while downside may be limited, the firm sees little near-term upside potential and expects in-line performance from current levels.