Shares of Home Depot Inc. edged up 0.3% in afternoon trade Wednesday, after Morgan Stanley said the recent weakness has created a “compelling entry point” for investors. The stock has tumbled 13.7% since closing at a record $207.23 on Jan. 26, while the SPDR S&P Homebuilders ETF has lost 10.4% and the Dow Jones Industrial Average has declined 6.7%. Morgan Stanley analyst Simeon Gutman reiterated his overweight rating and $210 stock price target, saying he left a recent meeting with management “reassured” about housing market drivers and underlying demand over the next 12 months. “The market is worried about the durability of home improvement demand in the face of rising interest and mortgage rates,” Gutman wrote in a note to clients. “Our meetings reinforced several strengths of the story: a favorable macro backdrop, an ability to take market share through differentiation, investing for the future, and organizational cohesion that increases productivity and efficiency while minimizing execution risk.”
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