The Home Depot, Inc. (NYSE: HD) was an incredible issue to watch during the fourth quarter of 2011. The stock managed to get back above $40.00 recently and somehow it managed to recover more than 50% from its 52-week low. What is so amazing here is that Home Depot and rival The Lowe’s Companies Inc. (NYSE: LOW) have not truly started to reflect a major resurgence of spending on home repairs nor on new contractors building new homes. The good news, and an issue that the retail giant knows it can count on, is that houses need repair and sprucing up after several years whether an owner of a house wants to spend the money or not.
Shares are now at $42.43 after a 0.65% gain today and the 52-week trading range is $28.13 to $42.90. More important is that the Thomson Reuters consensus price target is $42.30 on the stock. That implies that analysts will have to take action of some sort. The logic would dictate that analysts will either have to lower their ratings based upon valuation OR they will have to raise their estimates and price targets to accommodate the current share price.
This is not just near 52-week highs. Home Depot is now challenging 5-year highs in the stock not seen since 2007. What if the housing news starts to actually get good again rather than just less bad?
We won’t pass judgment yet but Home Depot was just listed as one of the five least attractive DJIA stocks based upon “analyzing the analysts” for 2012 target prices.
JON C. OGG
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