Home Depot sluggish after downgrade

Goldman Sachs lowers its rating for the home improvement chain, citing tough macro and housing data.

By TheStreet Staff Oct 5, 2010 12:05PM

thestreetBy Andrea Tse, TheStreet


Updated: 8 p.m. ET.

Shares of Home Depot (HD) were largely left out of Tuesday's rally after the stock was downgraded by Goldman Sachs (GS).


Goldman Sachs lowered its rating for Home Depot to "neutral" from "buy" on less compelling valuation and upside.

Home Depot shares dipped this morning but finished up 0.2% to $31.47 to $31.74, the second-worst performer among the 30 stocks in the Dow Jones Industrial Average ($INDU). The Dow finished the day up 193 points, or 1.8% to 10,945, its best close since May 3.


"The company is executing well, but as the stock has bounced off the bottom in the midst of choppy macro data and soft channel checks and into tougher sales and margin compares over the next two quarters, valuation and upside are less compelling," Goldman Sachs analyst Matthew Fassler explained in an investor note.

"The exceptional HD turnaround story is still very much under way but is well understood by the market today."


Fassler said he's becoming increasingly selective on the do-it-yourself sector in the face of "tough" macro data and "uninspiring" channel check. He added that housing data remain weak.

"While we have noted a diminished correlation between sector sales and housing turns, leading indicators are subdued."


Goldman Sachs currently has a $35, 12-month price target for Home Depot stock.  Home Depot is up 9.7% on the year, sixth-best among the Dow stocks.  


Related Articles

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.



Quotes delayed at least 15 min
Sponsored by:


There’s a problem getting this information right now. Please try again later.
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] Nov crude oil is trading higher this morning as the U.S. and Arab allies have begun missile strikes in Syria on the Islamic State. The energy component dipped to a session low of $90.77 moments after equity markets opened but quickly recovered back into positive territory. It popped to a session high of $91.90 in recent action and is now up 0.9% at $91.64.

Oct natural gas is chopping around in a tight range between $3.88 and $3.90 in the black. It is currently up 1.2% at ... More


There’s a problem getting this information right now. Please try again later.
Sponsored by: