UPDATE: SunTrust Initiates Coverage on The Home Depot as Recovery Story Has a Long Way to Go
In a report published Wednesday, SunTrust Robinson Humphrey analyst Keith Hughes initiated coverage on The Home Depot (NYSE: HD) with a Buy rating and $90.00 price target.
In the report, SunTrust Robinson Humphrey noted, “We are initiating on HD with a BUY rating based on the following points. (1) We believe a recovery in larger ticket consumer discretionary spending from the recession is just now beginning and above average growth will run for several more years. The previous peak is attainable and could be surpassed given modest renovation growth seen in 2001-2005. (2) We expect HD's efforts in margin improvement will continue with internal initiatives plus the mix shift that usually occurs during recovery periods. (3) HD's commitment to returning cash flow to shareholders via share repurchases and dividends should remain strong as borrowing and free cash flow should also continue to grow. (4) The above factors will provide a slightly higher than normal P/E multiple, in our view.”
The Home Depot closed on Tuesday at $74.18.
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