Home Depot's SRS Buy 'Strengthens Market Positioning': Analysts Predict Earnings Growth
Portfolio Pulse from Priya Nigam
Home Depot Inc (NYSE:HD) shares fell after announcing the acquisition of SRS Distribution for $18.25 billion. Analysts from Wedbush and Telsey Advisory Group predict the acquisition will strengthen Home Depot's market positioning and drive earnings growth. Wedbush raised its price target from $380 to $410, citing the deal's potential to increase Home Depot's total addressable market by $50 billion. Telsey Advisory Group raised its price target from $335 to $360, noting the acquisition's accretive impact on non-GAAP earnings, despite being dilutive on a GAAP basis due to amortization expense.
April 01, 2024 | 4:29 pm
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POSITIVE IMPACT
Home Depot's acquisition of SRS Distribution for $18.25 billion is expected to strengthen its market positioning and drive earnings growth, with analysts raising price targets.
The acquisition of SRS Distribution is seen as a strategic move for Home Depot, expanding its total addressable market by $50 billion and enhancing its capabilities to serve the complex Pro customer base. Analysts' positive outlook and raised price targets reflect expectations of increased earnings and market positioning, despite the short-term price dip. The deal's accretive impact on non-GAAP earnings, excluding synergies, supports a positive short-term impact on Home Depot's stock.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100