Home Depot stock is now a buy, as analyst cites strong housing market and aging infrastructure

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Shares of Home Depot Inc. rose on Thursday after the home improvement operator was upgraded to Truist, as analyst Scott Ciccarelli expects the housing market to rise due to supply and demand imbalances, pandemic-induced behavioral changes and aging housing. There will be a “significant” increase in infrastructure. home improvement industry.

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Ciccarelli said he also believes the benefits of the company’s size and scale and increased supply chain capabilities will help it gain market share from rivals.

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stock hd,
-0.18%
Tackled 0.7% in premarket trading. At Wednesday’s closing of $389.40, the stock was down 6.4% since it closed at a record $416.18 on December 7, but was still up 15.1% over the past three months, while the Dow Jones Industrial Average (DJIA),
-0.08%
A gain of 5.6 per cent was achieved.

After being on hold in Truist for at least the past three years, Ciccarelli covered Home Depot with a buy rating. The stock price target was raised from $420 to $448.

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“With current home inventory levels near historic lows, we expect home prices to rise, which should further increase domestic investment activity,” Ciccarelli wrote in a note to clients. “Furthermore, as housing infrastructure continues to age, ~65% of single family homes in the US are now 30+ years old and older homes need more maintenance/repair activity.”

He said investing more than $11 billion in Home Depot’s supply chain to provide next- and same-day delivery on large parcel product to more than 90% of the U.S. population helped the company gain market share and expand its reach into new markets. should help.

read alsoHome Depot: Connects with Walmart’s GoLocal for faster delivery service.

“Home Depot is ~50% larger than its top-rival Lowe’s, giving it unmatched size and scale in the friendly home improvement sector,” wrote Ciccarelli. “Heavy investment in the company” One Home Depot Strategy This should help accelerate stock gains in this still highly fragmented sector.”

Shares of Home Depot have gained 42.1% in the past 12 months since Wednesday, while Lowes Companies Inc. shares are low,
+0.24%
an increase of 47.6%. In comparison, SPDR S&P Homebuilders Exchange Traded Fund XHB,
+0.12%
The Dow has gained 34.1% and the Dow is up 16.8% over the previous year.

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