Home Depot price target raised to $246 from $242 at Goldman Sachs
Goldman Sachs analyst Kate McShane noted that Home Depot's comp growth accelerated to 3.6% in Q3 from about 3% in the first half of the year, but were behind plan as the company's strategic initiatives are still ramping. However, if adjusted for the impact of lumber deflation, the timing of Black Friday events, foreign exchange and hurricane comparisons, Q3 core comps were up about 5%, estimates McShane. The analyst took away a number of positives from the company's conference call as well, but isn't surprised by the stock's reaction to the company's lowered comp outlook in the context of recent retail earnings reactions, McShane tells investors. However, considering she still considers Home Depot a best-in-class retailer with share gain potential, she keeps a Buy rating on the stock and rolled forward her valuation, leading to an increased price target of $246.