Evercore ISI has maintained a positive outlook on Home Depot (NYSE: NYSE:HD), keeping an Outperform rating and a $415.00 price target for the company's shares. The firm's analysis followed Home Depot's recent financial performance, which included a minor shortfall in comparable store sales (comps) but an earnings per share (EPS) figure that exceeded expectations.
Despite this, Home Depot has revised its second-half comps outlook, now projecting a decline rather than an improvement over the first half of the year.
The revised full-year comp guidance suggests a decrease of 200 to 300 basis points, translating to a negative 3% to 4% in the second half. The revision is based on the assumption that trends from the first half will persist at the higher end, while the lower end accounts for a potential drop in demand not currently observed.
Adjustments were also made to the EPS forecast, now estimated to shrink by 4% to 2% year-over-year on a GAAP basis and by 3% to 1% on a non-GAAP basis.
Evercore ISI anticipates that the market consensus for Home Depot's 2024 EPS will likely land between $14.50 and $15.00. The firm projects that the midpoint of this range will be around $14.75.
The investment firm's commentary came ahead of Home Depot's conference call, scheduled for 9 a.m., where topics such as the comp trajectory during the quarter, differences between professional versus do-it-yourself customer trends, current market conditions, the impact of the SRS acquisition, and margin flow-through were expected to be key points of discussion.
Home Depot reported second-quarter earnings per share (EPS) of $4.60, surpassing estimates despite a 3.3% decline in comparable sales. Despite this, the company has adjusted its annual earnings outlook due to reduced consumer spending on home improvement projects, expecting diluted EPS to decrease between 2% and 4%, and annual comparable sales to fall between 3% and 4%.
However, Home Depot raised its total sales forecast to a range of 2.5% to 3.5% and anticipates the acquisition of SRS Distribution to close in the second half of the year, contributing approximately $6.4 billion in revenue.
Financial firms such as Citi, Truist Securities, Jefferies, RBC Capital Markets, and Stifel have maintained their ratings on Home Depot and adjusted their price targets in light of these recent developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.