2. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Shareholders In Q1 2024: 70
The Home Depot, Inc. (NYSE:HD) is another well known American home improvement products retailer. The average of 31 one year analyst share price targets is $396.26 and the average share rating is Buy. Following The Home Depot, Inc. (NYSE:HD)’s first quarter earnings report, Bank of America reiterated their Buy rating for the shares and stuck to a $425 share price target. The coverage saw the bank express its confidence in The Home Depot, Inc. (NYSE:HD)’s ability to grow market share with home improvement professionals, as it cited the fact that 50% of The Home Depot, Inc. (NYSE:HD)’s sales are to professional customers as the reason behind its optimism. In comparison, 25% of Lowe’s sales come from these customers.
As this year’s March quarter ended, 70 hedge funds covered by Insider Monkey’s research had bought a stake in The Home Depot, Inc. (NYSE:HD). Ken Fisher’s Fisher Asset Management held the largest stake that was worth $3.4 billion.
The firm currently has a forward price to earnings ratio of 21.93. Compared to the S&P 500’s forward P/E reading of 21, this means that the home improvement stock is expected to grow roughly in line with the broader market. The Home Depot, Inc. (NYSE:HD)’s shares have gained roughly 52.96% over the past four years, and its revenue has grown by roughly 15%. This shows that the share price growth has outpaced revenue growth, implying that the reason for the growing valuation might be somewhere else than the revenues. Home Depot has also been attracting some ESG investors. Madison Sustainable Equity Fund made the following comment about The Home Depot, Inc. (NYSE:HD) in its Q3 2023 investor letter:
“We updated the sustainable scorecard for The Home Depot, Inc. (NYSE:HD) and maintained our Above Average Rating. Home Depot’s corporate responsibilities focus on three pillars: focusing on its people, operating sustainably, and strengthening its communities. Home Depot continues to focus on its people by investing billions of dollars in wages, training, and benefit enhancement. The company’s environmental targets include the reduction of direct (Scope 1) and indirect (Scope 2) emissions by 42% by 2030, as well as a 25% decrease in emissions related to the “use of products sold” (Scope 3 emissions). Both targets are from a 2020 base year.
Separately, The Home Depot Foundation announced that it will invest $6 million in skilled trades training to address the 400,000 job openings across the construction industry. This grant launches a new program that will provide free, skilled trades training and scholarships for veterans and military families.”
