Home Depot to Buy Back $20B in Stock; Street Says Buy


Home Depot (HD) announced a new share repurchase program of $20 billion. The new buyback program replaces the previous share authorization. Home Depot is the largest home improvement retailer in the United States, supplying tools, construction products, and services.

Furthermore, the retailer announced a quarterly cash dividend of $1.65 per share, payable on June 17, 2021.

On May 18, Home Depot delivered solid first-quarter results driven by increased demand for home renovations and construction. Net sales were up 32.7% to $37.5 billion, affirming a strong start to the year. Net earnings came in at $3.86 per diluted share, up 85.6% year-over-year. (See Home Depot stock analysis on TipRanks)

Following the earnings announcement, Oppenheimer analyst Brian Nagel maintained a Hold rating on the stock.

Nagel commented, “We look very favorably upon today’s report from HD and view the company’s recent sales and profit strength as another clear signal of underlying operating prowess at the chain and of management’s ability to capitalize well on continued COVID-19-related upheaval in the broader consumer landscape.”

Consensus among analysts on Wall Street is a Strong Buy based on 15 Buy and 5 Hold ratings. The average analyst price target of $350.88 implies 11.1% upside potential to current levels.

HD scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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