8/12/24 - $hd - Limited upside at $345. watching only

8月12日

8/12/24 :: VROCKSTAR :: HD
Limited upside at $345. watching only

- we've seen the housing starts linger
- rate cuts probably need 3-6 mo to drive inflection on build capex
- HD remains excellent biz, but at nearly 27x PE (when you adj. for net debt), and flat EPS that's a tough one for me to stomach.
- feels like this is sticky valuation for the fact that it's such a large cap and being supported by passive flows
- "feels" to me like a good result gets trimmed/ right sized lower (by institutions) and a bad result is a tough one to buy esp w the macro backdrop.
- at 4.5% fcf yield even with zero growth this looks better than cash (but honestly there's a lot of stuff that's large cap that does) which means the downside is probably not one of these wicked drawdowns we've been seeing on the sub $1 bn cap stuff.
- i'd be interested in dip buy/ swing on a big enough drawdown or bad CC speech or w/e.
- just don't see the upside r/r playing this to the long side into print

gl to the holders. lmk if u see it differently.

V