Jefferies Expects Home Depot Share Buybacks (HD)

Jefferies & Co. expects "a substantial portion of an estimated $5.6 billion of Home Depot's HD FCF (after dividends) over the next two years to be used for share buybacks," it said in a client note today. Jefferies maintains a Buy rating on the stock. Jefferies analysts note to "look for less bumpy 2nd half growth as a low interest rate environment and healthy housing turnover rates over the past several months potentially spur sales growth again." Despite the forecast, Jefferies cut Home Depot's price target to $33 from $41. Further, Jefferies comments that "The Home Depot is still benefiting from various merchandising, system and distribution investments that should allow it to generate internal improvements to lower inventory, increase gross margin and improve returns." The Home Depot, Inc. is a home improvement retailer. Shares lost 1.88% today, to close at $27.71.