RBC Capital Markets analyst Steven Shemesh initiated coverage on The Home Depot Inc (NYSE: HD) with a Sector Perform rating and a price target of $303.
The analyst says that long-term structural tailwinds for the home improvement industry are clear, given the chronic undersupply of homes, the rapidly aging housing stock, and the rising average size of houses.
Amid industry tailwinds, HD's recent supply chain investments and structurally advantaged real estate positions it well for share gain, according to the analyst.
However, Shemesh sees near-term top-line risk due to higher interest rates, continued inflation, and a shift of consumer spending towards services.
The analyst estimates comp sales and EPS of -2.9% (cons: -2.9%) and $15.17 (cons: $15.19) in FY23 and +0.6% (+1.1% street view) and $15.97 (cons: $16.11) in FY24.
Price Action: HD shares are trading lower by 0.24% at $293.87 on the last check Tuesday.