Analysts Adjust Home Depot's Estimates, Trim Price Targets Posts Q3 Results: Details

Several analysts cut price targets and estimates of The Home Depot Inc HD following its Q3 FY23 results yesterday.

The Home improvement retailer reported Q3 FY23 sales decline of 3% year-on-year to $37.71 billion, beating the analyst consensus estimate of $35.66 billion. EPS of $3.81 beat the analyst consensus of $3.58.

Home Depot narrowed its FY23 sales and comparable sales forecast for a decline of 3% - 4% (previously a decline of 2% - 5%) and an EPS decline of 9% - 11% (previously 7% - 13% decline). 

Goldman Sachs analyst Kate McShane reaffirmed a Buy rating with a lowered price target of $347 (from $350) due to decreased estimates.

The analyst reduced the FY23 EPS estimate to $15.15 (from $15.20), reflecting Q3 results and incremental top-line pressure during Q4. 

Also, McShane cut FY24 and FY25 EPS estimates to $15.80 (from $16.18) and $16.88 (from $17.15), assuming softer top line and margins.

Nevertheless, the analyst still believes that the company is well positioned to benefit from recent housing price appreciation, aging housing stock, housing shortage, etc., in the near and long term.

Truist Securities analyst Scot Ciccarelli cut the price target to $340 from $341 and maintained a Buy rating.

The analyst lowered EPS estimates to $15.10 (from $15.25) vs. consensus of $13.63 for FY23, $15.60 (from $15.75) vs. $14.25 street view for FY24 and $16.65 (from $16.80) for FY25. 

Oppenheimer analyst Brian Nagel reaffirmed the Outperform rating and price target of $360. 

The analyst increased the EPS estimate to $14.99 (from $14.78) for FY23, consistent with the management guidance midpoint and vs. consensus $15.11.

On the other hand, Nagel reiterated EPS estimates at $16.06 vs. street view of $15.78 for FY24 and $17.32 vs. consensus: $16.84 for FY25.

The analyst says moderating rates and waning pandemic-related disruptions will likely help HD underpin a return to normalized growth in the next several quarters.

Guggenheim analyst Steven Forbes lowered the price target to $340 from $360 while maintaining the Buy rating.

The analyst lowered Q4 FY23 EPS estimates to $2.72 (from $3.08) on expected timing-related gross margin headwinds to continue to pressure Y/Y trends. Also, Forbes cut its EPS outlook to $15.01 (from $15.06) for FY23 and $15.34 (from $15.54) for FY24.

RBC Capital Markets analyst Steven Shemesh trimmed the price target to $299 (from $303) and reaffirmed a Sector Perform rating.

The analyst adjusted comp sales and EPS estimates to -3.3% (from -2.9%) and $15.05 (from $15.17) for FY23 and -0.3% (from +0.6%) and $15.32 (from $15.97) for FY24. Shemesh expects increased pressure from slowing economic data fueling the peak rates in FY24.

Telsey Advisory Group analyst Joseph Feldman maintained its Market Perform rating and price target of $325.

Feldman reduced the FY23 EPS estimate to $15.03 (from $15.11) on a comp of (3.2%).

For FY24, the analyst cut estimates for EPS to $15.56 (from $15.71) on a comp of 0.6%.

Price Action: HD shares are trading higher by 1.36% at $307.76 on the last check Wednesday.