Cramer’s Morning Thoughts: 20 Stocks to Watch

9. The Home Depot Inc. (NYSE:HD)

Number of Hedge Fund Investors: 86

Oppenheimer maintained a “hold” rating on The Home Depot Inc. (NYSE:HD), a Club name, but raised its price target to $400 per share. While they prefer Lowe’s Companies, Inc. (NYSE:LOW) due to its more attractive stock valuation, The latest Morning Thoughts post highlighted that The Home Depot Inc. (NYSE:HD)’s strong exposure to professional customers is a key advantage.

“Oppenheimer analysts still have a hold-equivalent rating on Club holding Home Depot but boosted their price target to $400 per share. Oppenheimer prefers Lowe’s for its discounted stock valuation. We like Home Depot’s exposure to professional customers.”

The Home Depot, Inc. (NYSE:HD) is an appealing investment option, driven by strong financial results and favorable conditions in the home improvement sector. In its Q2 2024 earnings report, The Home Depot, Inc. (NYSE:HD) reported revenue of $42.9 billion, marking a 6% increase from the previous year, along with a net income of $3.8 billion and same-store sales growth of 4.5%.

This indicates that homeowners continue to prioritize renovations and maintenance, boosting demand for The Home Depot, Inc. (NYSE:HD)’s products. The company is focusing on improving its technology and online shopping experience, making it easier for customers to find and buy what they need. Recent efforts include opening new stores and expanding online services, such as virtual consultations and DIY workshops, to engage more customers.

Additionally, The Home Depot, Inc. (NYSE:HD) is committed to sustainability by offering eco-friendly products that appeal to today’s consumers. With its solid financial position and strategic initiatives, The Home Depot, Inc. (NYSE:HD) is well-prepared to thrive in a changing economic landscape, making it a strong choice for investors.

Polen Focus Growth Strategy stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q2 2024 investor letter:

“In the second quarter, the top relative contributors to the Portfolio’s performance were all names we do not hold: The Home Depot, Inc. (NYSE:HD), Meta Platforms, and AbbVie. With Home Depot, much of the quarter’s weakness came in April, as a higher-than-expected inflation reading caused investors to question the likelihood of imminent rate cuts in 2024. Given Home Depot’s sensitivity to interest rates, as it relates to home improvement projects, the stock sold off in the period.”