Mizuho raises Home Depot target amid interest rate cuts

Source: Investing Posted 11/10/2024, 14:14

Mizuho Securities has updated its forecast for Home Depot (NYSE: HD). raising its price target to $435 from $400 previously, while maintaining its “Superior Outperformer” rating. The adjustment comes as the company expects an increase in demand for the retailer for home improvements.

driven by historical patterns observed after interest rate cut cycles.

The company expects further monetary easing to spur a return to year-on-year growth in low-digit comparative sales for Home Depot over the next few years. This forecast is based on the expectation that lower funding prices will trigger a wave of pent-up demand in the sector.

Mizuho also noted that Home Depot’s valuation has risen recently.

now hovering in the mid-twenties range in terms of price-to-earnings (P/E) ratio. Despite this increase, the company remains optimistic about the stock’s potentia.

proposing a bullish scenario where the share price could reach $500.

This view is supported by the likelihood of upward earnings revisions over the next 12 to 18 months. In short, the updated Home Depot target price by Mizuho reflects a confident outlook for the company’s prospects in light of potential economic changes.

The company confirms its rating of “superior performance”, stating that it believes that Home Depot stock will perform well compared to the market or its sector in the foreseeable future.

Piper Sandler raised its target price for Home Depot shares to $455, while maintaining its “higher weight” rating. This adjustment comes due to a rise in cash refinancing activity.

weighed down by the recent decline in the 30-year mortgage rate.

The company expects significant growth in the home improvement sector if mortgage rates continue to trend downward. Loop Capital has also revised Home Depot’s price target from $330.00 to $360.00, while maintaining a “hold” rating. The adjustment reflects a revised growth outlook for the recently acquired SRS Distribution.

Home Depot’s revised company estimates for similar store sales in 2025 reflect expectations of the ongoing interest rate cycle. Shares of US homebuilders saw a rally in trading ahead of the market opening after the Federal Reserve’s decision to implement a significant rate cut. The move sparked expectations of lower mortgage rates, which could spur the housing market.

Shares of major US homebuilders such as D.R. Horton Lennar and PulteGroup saw their share prices rise here it is about 3% before the market opens. The optimistic outlook from Mizuho Securities is in line with several key metrics and insights from Investing.

Home Depot showed a strong performance.

with a total yield of 41.12% over the past year and is currently trading near a 52-week high of 97.6% of that level. The strong return of 16.58% over the past three months boosts this momentum, indicating continued investor confidence.

Investing’s tips highlight Home Depot’s financial stability and shareholder-friendly policies. The company has raised dividends for 14 consecutive years and maintained dividend payments for 38 years.

demonstrating its commitment to returning value to shareholders.

This is especially important given Mizuho’s positive outlook.

as he notes that Home Depot It has the financial flexibility to take advantage of potential growth opportunities while maintaining its dividend policy.

While the current price-to-earnings ratio of 27.5 is in line with Mizuho’s observation of a mid-twenties valuation.

Investing data shows a dividend yield of 2.2%, which may appeal to income-focused investors in a potentially low interest rate environment.

The company’s strong market position is underlined by its large market capitalization of $407.21 billion.