Home Depot price target lowered to $421 from $437 at Bernstein

Bernstein analyst Zhihan Ma lowered the firm’s price target on Home Depot (HD) to $421 from $437 and keeps a Market Perform rating on the shares. The firm expects renewed inflationary pressure on the back of potential tariffs and wage inflation in 2025, which is a net positive for mass/club retailers, a net neutral for dollar retailers as consumers’ need to trade down is offset by higher labor costs, and a net negative for home improvement retailers as this could dampen the rate cut outlook. Historical evidence suggests that mass/club retailers generally see accelerated comp sales growth but experience gross margin pressure to a varying degree in inflationary periods.