Home Depot Target Raised To $150, Argus Highlights 'Standout Sales'
Home Depot Inc (NYSE: HD) reported a 1Q16 EPS beat, with strong sales growth. Argus’ Chris Graja maintained a Buy rating for the company, while raising the price target from $145 to $150. The analyst highlighted that the new price target reflected a total potential return of more than 15 percent, including a dividend yield of ~2 percent.
Home Depot reported its 1Q EPS at $1.44, representing 19 percent growth, and beating the Argus estimate of $1.32 and the consensus of $1.35. The company’s quarterly results were supported by an improving housing market, robust demand from professional contractors, growth in big-ticket projects, superior expense control and favorable weather in February, analyst Chris Graja mentioned.
Home Depot recorded 9 percent growth in sales to $22.76 billion, above the Argus estimate of $20.04 billion. Comp sales at US stores climbed an impressive 7.4 percent, significantly higher than the consensus expectation of 4.9 percent.
Management raised full-year EPS guidance from a range of $6.12-$6.18 to $6.27, above the consensus expectation of $6.22.
Graja raised the EPS estimates for FY17 and FY18 from $6.15 to $6.30 and from $6.90 to $7.00, respectively.
“Increasing returns on capital, signs of improving customer service during recent store visits, rising home prices, and impressive execution of the business plan support our conviction that even after raising the operating margin by almost 400 basis points over the last four years, Home Depot still has room to increase earnings and profitability,” the analyst wrote.
Latest Ratings for HD
|Feb 2017||Morgan Stanley||Upgrades||Equal-Weight||Overweight|
|Feb 2017||Bernstein||Initiates Coverage On||Market Perform|
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