Citi Reports on Home Depot (HD)

Citi released a report on Home Depot HD in light of Aaron Carmack's recent promotion to President of Home Depot Canada. Carmack will replace current president Annette Verschuren when she steps down on January 30th. According to the report, Carmack's thirty years experience in the retail industry, including seven at HD, will “make him a strong fit to manage HD's Canadian operations. Under Verschuren's leadership, Home Depot Canada grew from a handful of outpost stores to the nation's largest home improvement retailer with 179 stores. Citi expects a smooth transition, and rates Home Depot with a Buy rating with Medium Risk and a 12-month Price Target of $36. Citi notes that “while there are fewer opportunities for square footage growth, HD still has significant opportunity to drive topline and margin benefits from its merchandizing, supply chain, and technology initiatives.” As the housing market recovers, Citi expects the company to gain market share in the home improvement industry. However, the report cautions that “a greater-than-expected or prolonged slowdown in the housing market and/or a decline in consumer spending could negatively impact sales and performance. Additionally, if HD's management fails to “improve the company's core retail business” or “execute its merchandizing and supply chain initiatives” it could fall short of Citi's target. Home Depot is currently trading at $34.95 per share, up 0.34 percent from yesterday's close.