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Investing.com - UBS has reiterated its Buy rating and $475.00 price target on Home Depot (NYSE:HD) following the company’s second-quarter results. According to InvestingPro data, the stock currently trades above its Fair Value, with analysts maintaining a bullish consensus and 8 analysts recently revising earnings estimates upward.
The home improvement retailer demonstrated signs of market share gains in the second quarter, with its U.S. comparable sales outperforming the Census Bureau retail sales category by 251 basis points, a significant improvement from the 38 basis points outperformance in the previous quarter.
Home Depot also achieved an estimated 50 basis points of underlying gross margin expansion, which UBS attributes partly to improvements in shrink management and supply chain efficiencies.
These positive factors position the company favorably for an eventual market recovery, according to UBS, despite uncertainty around the timing and magnitude of a potential upturn in the home improvement sector.
UBS analyst Michael Lasser indicated that Home Depot’s second-quarter results provide evidence supporting the view that the company should see "outsized gains as a recovery takes shape."
In other recent news, Home Depot’s second-quarter results showed a slight miss in earnings per share but highlighted improving underlying trends, with U.S. comparable sales increasing by 1.4%, the strongest performance in over two years. The quarter ended with July sales growing by 3.3%, indicating positive momentum. Analysts have responded to these developments with a series of price target increases. Baird raised its price target to $450, citing broadening consumer engagement across product categories. Goldman Sachs adjusted its target to $444, maintaining a Buy rating due to stronger top-line trends. Evercore ISI also lifted its target to $450, emphasizing Home Depot’s investments in professional services and technology. DA Davidson went further, raising its price target to $475, noting the retailer’s market share gains despite high mortgage rates. These analyst actions reflect optimism about Home Depot’s growth potential and strategic initiatives.
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