September 5, 2018

HD – Market expectations are for continued Uniform ROA expansion, and management is confident in their value propositions, sales events, and their performance


  • The Home Depot Inc. (HD:USA)currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 22.3x Uniform P/E, implying bullish expectations for the firm. Moreover, management is confident in their ability to offer their customers different value propositions, sustain elevated Q2 performance levels, and in their upcoming sales events
  • Specifically, management is confident in their ability to offer different value propositions to their customers, and in their upcoming lineup of sales events for customers. Additionally, they are confident that tariff pressures will be mitigated by suppliers shifting their production domestically, and that gross margin contraction was due to higher transportation and fuel costs, as opposed to operational underperformance. Also, they are confident in their ability to sustain positive comps across U.S. stores from Q2
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