Market Overview

Wall Street Weighs In On Home Depot's Blowout Q2, BofA Upgrades Stock

Wall Street Weighs In On Home Depot's Blowout Q2, BofA Upgrades Stock

Home Depot Inc (NYSE: HD) was one of several major retailers to report blowout second-quarter earnings this week, sending the home improvement stock soaring.

Home Depot posted second-quarter EPS of $4.02 on $38.05 billion in revenue Tuesday. Both numbers topped consensus analyst estimates of $3.71 and $34.53 billion, respectively. Revenue was 23.4% higher year-over-year.

U.S. same-store sales rose 25%, and Home Depot's average purchase amount was up 10.1%. It was the first quarter of double-digit same-store sales growth for Home Depot in more than seven years.

Several analysts weighed in on the stock following the impressive print. 

Long-Term Tailwinds For Home Depot: BofA Securities analyst Elizabeth Suzuki said it’s not too late to buy Home Depot shares to capitalize on the shelter-in-place environment.

"Although home improvement spending in the coming quarter may decelerate amidst sequentially declining government stimulus/unemployment benefits, we believe that the longer-term tailwinds for the home improvement industry are generally favorable," the analyst said in a Wednesday upgrade note. 

Morgan Stanley analyst Simeon Gutman said Home Depot is a best-in-class home improvement investment, adding that the housing market has structural, long-term tailwinds.

“In Q3, we assume comps moderate from mid-20s in the first two weeks of August to 20% in the last two weeks of August, followed by 13% in September and 7% in October,” the analyst said. 

Home Depot's Market Share Opportunity: Raymond James analyst Matthew McClintock said investors shouldn’t be turned off by Home Depot’s size given that the company still has meaningful market share opportunities.

“Bigger picture, we see Home Depot as the best-in-class retailer in an effective duopoly, one which should benefit from macro tailwinds for at least the balance of this year,” the analyst said. 

KeyBanc Capital Markets analyst Bradley Thomas said trends in “nesting” industries remain strong.

“We believe HD’s results bode favorably for the industry's 6-12 month outlook and align with our Nesting thesis that home spending will continue to take share of wallet from areas such as travel and entertainment,” the analyst said. 

Home Depot Ratings, Price Targets: BofA Securities upgraded Home Depot from Neutral to Buy and raised the price objective from $290 to $330. 

Morgan Stanley has an Overweight rating and increased the price target from $285 to $295. 

Raymond James has an Outperform rating and increased the price target from $295 to $305. 

KeyBanc has a Sector Weight rating.

HD Price Action: Home Depot shares were trading down 0.72% at $282.95 at the time of publication Wednesday. 

Related Links:

Cramer On Why He Expects Big Retailers To Smash Earnings Estimates

Pandemic Sparks 97% Jump In E-Commerce Sales For Walmart

Photo courtesy of Home Depot. 

Latest Ratings for HD

Oct 2020Morgan StanleyMaintainsOverweight
Sep 2020OppenheimerDowngradesOutperformPerform
Aug 2020B of A SecuritiesUpgradesNeutralBuy

View More Analyst Ratings for HD
View the Latest Analyst Ratings


Related Articles (HD)

View Comments and Join the Discussion!

Posted-In: BofA SecuritiesAnalyst Color Earnings News Upgrades Price Target Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at