Bank of America backs Home Depot

Home improvement retail is stuck in an awkward stretch. Housing activity is still soft, mortgage rates are still pinning people in place, and the easy recovery call has not really worked yet. But Bank of America just came down on one side of the trade anyway — it restarted coverage on Home Depot with a Buy ratin(finance.yahoo.com)t looks better positioned to grind through a weak market now and accelerate harder when the market finally turns. (finance.yahoo.com) ### What changed today? Bank of America reinstated coverage on both big home-improvement chains, but split the pair. Home Depot got a Buy. Lowe’s got a Neutral. The firm’s analysts, Christopher Nardone and Madeline Cech, argued that Home Depot should outgrow peers because it has more exposure to professional contractors — the “Pro” customer — in a market where do-it-yourself demand is still sluggish. (finance.yahoo.com) ### Why does the Pro customer m(finance.yahoo.com)rms, and high mortgage rates keep a lot of homeowners from moving or taking on big discretionary projects. In that backdrop, the steadier customer is often the contractor who still has to reroof a house, redo a pool, or handle a commercial job. Home Depot gets roughly half of its retail sales from Pro customers, and BofA said that segment has posted five straight quarters of positive comparable sales. (finance.yahoo.com) ### What is BofA really betting on? Not just survival in a slow market. Acceleration after it. The bank’s note basically says Home Depot can keep traffic and comps in better shape than rivals now, then get an extra lift later as industry pricing distortions fade and project demand normalizes. That is why a $374 target matters — it is not a call on next week’s housing data, it is a call on earnings power a couple of years out. (finance.yahoo.com) ### W(finance.yahoo.com)sition of SRS Distribution in June 2024, adding a large specialty distributor focused on roofers, landscapers, and pool contractors. Home Depot has also been leaning on GMS as part of the same broader push into more complex professional jobs. The logic is that these businesses widen Home Depot’s reach beyond the weekend DIY shopper and deeper into recurring trade spend. (ir.homedepot.com)fA said roofing shipments were heavily depressed in 2025, partly because there were no major hurricanes and comparisons were tough. That matters because SRS is tied closely to roofing and adjacent specialty categories. If 2025 was the trough, then even a normal rebound — not a boom — could create upside that is not fully showing up in current expectations. (finance.yahoo.com) ### Does Home Depot(ir.homedepot.com) 2025 investor day, Home Depot reaffirmed fiscal 2025 guidance and laid out a preliminary 2026 view that still looked restrained: a home-improvement market between down 1% and up 1%, comp sales from flat to up 2%, and diluted EPS from flat to up 4%. That is not explosive. But it does sketch the base case BofA is building on — modest market improvement plus better mix and acquisition benefits. (ir.homedepot.com)hat is the catch. BofA thinks Lowe’s is making progress with pros, but DIY still makes up about 70% of its sales. The bank also flagged that Lowe’s recent comp recovery leaned more on pricing and ticket size than on customer transactions. So if price increases roll off in the back half of 2026, the volume story has to do more work. Home Depot, in BofA’s view, needs less to go right. (finance.yahoo.com)or mix and specialty-distribution push make it look sturdier now and more levered to a rebound later. If the market stays frozen, the call gets harder. If roofing and Pro demand normalize, Home Depot has more ways to win. (finance.yahoo.com)