“R.itemList.length” “- this.config.text.ariaShown
“This.config.text.ariaFermé”
Bank of America analysts led by Elizabeth Suzuki raised their value target for Home Depot percentages from $290 to $330, and raised the inventory from unbiased to purchase, resulting in patented surveys and card data. The company cited several reasons for this increase, adding percentage market opportunities, moderate valuation and the Generation Y movement, among others.
JEN ROGERS: Welcome back to “The Final Round”. We have about 40 minutes left for the negotiation session. The Dow Jones maintains very small profits, while the S-P and NASDAQ have fallen slightly. The Dow Home Depot component also lost a little here today.
Bank of America, however, modernizes Home Depot to buy, expanding the target value to $330. It was $290. $290, by the way, home Depot’s recent inventory summit, which presents five reasons why it’s not too late to own. Five reasons here.
Let’s move on to someone who read the note and recently at Home Depot this weekend. That would be Dan Roberts. I guess you’ll probably move to a Home Depot every weekend. Are you there. You’ve moved to a new place. I mean, I’m passing through, there’s a lot to get at Home Depot.
So, of the five explanations why, I am convinced to the maximum here with the Millennials on the move, the urban exodus. Because once you walk into a house, there’s a lot to do. Do you buy that or is there any other explanation for why you think it would be more convincing?
DAN ROBERTS: Well, it’s definitely the most attractive fodding we can communicate about, and the juiciest cat, Jen, the Millennials who leave the cities. And I think many of us in our live broadcasts here, just anecdotally, know many other people who have suddenly and temporarily fled cities, temporarily or, in many cases, permanently, in this period.
Now, before I know about it, I mean, first of all, I think you also want to take a look at the retail spending figures that have increased for 3 consecutive months. They communicate on how to spend and share their wallets here. So I think that’s part of it. Maybe it’s a little more unstable and less exciting to discuss.
But Millennials are moving, I think it’s interesting, because, you know, we’re talking about profits in e-commerce, massive figures for virtual sales. The percentage accumulates through Walmart, Target, Etsy. We’re talking, you know, about the accumulation of between one hundred percent and 200 percent in the current quarter of virtual sales. But for Home Depot, a 26% increase in sales in comparable stores.
So, it’s a chain that, you know, there are things you can actually buy online, and there’s e-commerce for Home Depot, I think it’s a company that contradicts that trend, because for me at least it’s a position. you need to pass in person.
You know, I went yesterday, like you mentioned. I told you the break. I had camping gear like coal briquettes and stuff. These are pieces I need to see, touch and hold before I buy them, in many cases. I need to make sure it’s exactly the right thing to do.
And I think that applies to a lot of space projects. I mean, if other people buy something to fix something in their home, you have to be to see it with your eyes, especially if it’s something aesthetic that’s going to come into your home.
That’s just to say that Home Depot, like other channels I know, is reading your e-commerce strategy. He knows it’s important. You know, reinforcing that. But also, I think it’s not so much a precedent for this channel, because it’s a position where you need to communicate with orange apron experts. But yes, I think, you know, if other people leave the cities, it’s going to be a big problem.
Having said that, we will also have to take into account the many alarming statistics that show how our generation, that is, Generation Y, will not be as comfortable as our parents at our age, because of a number of factors. Thank you so much for that, baby boomers. And that’s why not everyone who leaves the cities owns it right away.
And even if they own it right away, not everyone who leaves the cities doesn’t do housing projects right away. So I’m also a little reluctant to come by and say that all of a sudden, everyone who, you know, is between 30 and 40 years old, are building and executing their own house building projects. But if it’s Home Depot, you’ve been in a very smart position lately.
MELODY HAHM: Yes. And as our own Jared Blikre says, wood has increased to 120% in the last 3 months. And with that, as we all remember, before the pandemic – maybe in March, April, May – we saw a lot of paintings stop, didn’t we? And many developers have had to suspend their projects.
What I find most attractive about this BoA note is that the pro is coming back. And many of those landscapers, structural staff, other people who are not DIY fans and come to you and renew anything or renew anything, they are back in action, which is a smart sign for the economy as a whole, knowing that other people are willing to invest in some kind of expensive items. And labor is the ultimate expensive load when it comes to such projects.
So I think it’s a pretty applicable point that BoA issues, because we keep in mind that 45% of Home Depot sales come from professionals, from those experts, compared to 20.25% at Lowe’s, which, in BoA’s brain, is probably a great credit to home Depot’s customer.
SEANA SMITH: Melody, I’m glad you talked about the professional, because I think it was interesting. And I didn’t realize the importance of professionals here for a call like Home Depot, the fact that they account for 45% of sales. Therefore, the fact that we see more professionals in progress is clearly positive for the company in the future.
Because I also sought to temporarily highlight one of the things that Bank of America also had in this note, which is the rating. Because I think when you look at a company or like Home Depot inventory, you see this wonderful increase, especially from the March low, but even since the beginning of the year. Inventory has gone up almost 30%. And it is negotiated with a relative premium, I think you can say, traditionally to your EP.
But we also have to take into account what we see in the market in general. And this, of course, is the fact that the wider S-P is also at all-time highs. So even though it’s expensive compared to the rest of the market, it still seems quite attractive. And that’s all Bank of America writes down.
And I think it’s worth mentioning, because with the inventory at $283, I think a lot of other people wonder if this momentum can continue or not. But Bank of America says it’s not afraid right now about the existing valuation and believes it can succeed with $330 a share.
JEN ROGERS: Yes, many other people consult it. I guess that’s why they said, I guess it’s not too late to get in, because I think they’ll probably get a lot of inquiries about whether it’s too late to enter Home Depot. This is our Bank of America call of the day.