UPDATE: Wedbush Initiates Coverage on The Home Depot with Neutral Rating, $90 PT as Stock Might Be a Victim of its Own Success

In a report published Friday, Wedbush analyst Seth Basham initiated coverage on The Home Depot HD with a Neutral rating and $90.00 price target. In the report, Wedbush noted, “We believe HD is on a roll. Under the leadership of CEO Frank Blake, during the recession, HD fixed core issues around store management, customer service levels and merchandising. Coupled with its more convenient locations and its skew toward maintenance, which is smaller ticket, and repair needs vs. LOW, HD comps have far outperformed LOW for years, and outperformed the market for the last five quarters. In some ways, HD is a victim of its own success. Its outperformance over the past few years has put it much closer to peak margins and sales productivity than LOW, suggesting more limited upside in the recovery. Yet, HD has captured significant traffic share and consumer mindshare from LOW over the last few years, giving it the opportunity to hang on to those customers as their needs migrate to bigger-ticket purchases with an improving economy and housing market. We believe this has elevated HD's performance recently, and the company is on pace to meet its 2015 12% operating margin goal more than year early.” The Home Depot closed on Thursday at $78.54.