Home Depot's (HD) fiscal Q4 results show that the company is benefiting from an uptick in home improvement demand despite a challenging macro environment, UBS said in a note on Wednesday.
The company reported Tuesday Q4 results that beat expectations. The quarter's adjusted earnings of $3.13 per share were ahead of the $3.04 consensus of analysts polled by FactSet, while revenue of $39.7 billion beat forecasts of $39.15 billion as compiled by FactSet.
According to UBS, the retailer is gaining share as its US Census sales were up 1.1% during the quarter. The analysts also said they believe the retailer "comped positive in both its Pro and DIY segments, with Pro outperforming."
The investment firm said it believes Home Depot is in "prime position" to generate strong earnings growth from a cyclical upturn in the category.
Home Depot's own guidance around comp growth pointed to 2025 adjusted earnings of $14.94, UBS said. The guidance is below the pre-print consensus of $15.65 for the year, but the company reported an additional $0.30 in 2024 earnings due to an extra week, UBS analysts noted.
The firm has a buy rating on the stock with a price target of $475.
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