#7 - Home Depot (NYSE:HD)
If you want to look at the housing market a completely different way, you can simply look to gobble up shares of Home Depot (NYSE:HD). People staying at home were getting projects done. And that’s reflected in a stock that went up over 60% since bottoming out in March.
But that’s not really surprising. The company was on an upward trend. The novel coronavirus was just a speed bump. Once investors realized that having consumers at home with little reason to avoid the to-do list, they would start doing home projects, Home Depot stock made sense.
Home Depot has a bit of a moat that protects it from Amazon (NASDAQ:AMZN). That’s because, for the most part, Amazon leaves Home Depot alone in the home improvement category. But that’s not the only reason Home Depot is thriving. The company made a major push into the digital space last year. And they’ve embraced the omnichannel model of allowing customers to get the products they want, when they want them, where they want them delivered.
Home Depot is going to face competition from Lowe’s (NYSE:LOW), but for now, the stock has a first-mover advantage. And that should hold for the rest of this year at least.
About Home Depot
The Home Depot, Inc operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows.
More- Current Price
- $414.04
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 23 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $426.00 (2.9% Upside)
If there’s been one thing that’s been clear about the stock market in 2020, it’s that investors want it to go higher. But I think the rally is based less on certainty about the fundamentals, but more that investors are willing the market to go higher.
This is interesting because investors generally hate uncertainty. And there are few sectors that don’t have uncertainty. In the housing sector, the big question is will construction be able to continue unabated? If so, then the outlook for housing stocks is very good.
But if there are regional shutdowns to stem a recurrence of the virus, that could be disastrous. That’s the risk that’s on the table. I think this market may be attractive for quite some time. And here’s why. Many Americans have been stuck at home. And for those homeowners who are continuing to work, they may be realizing they don’t like the current design of their home. All of a sudden, the open concept seems so 2019. Walls are starting to go back up, or at least that’s the desire.
The question will be whether owners choose to renovate an existing space or take a path of least resistance and search out a home that they can configure the way they want, from the ground up.
This will be one of the more interesting stories not just for the rest of 2020, but for years to come. Remember, some companies are going to be allowing workers to continue to work from home. So a home office may become a very real need.
More Investing Slideshows:
