Home Depot: Margin Reacceleration Through Pro Credit Boost

We initiate on HD with a Hold rating and $343 PT. The Home Depot, Inc. operates the largest home

improvement retail chain in the United States, servicing both homeowners and a loyal set of even more professional trades and specialist customers, with one of the deepest B&M footprints and e-commerce platforms. Behind the veil of NT pessimism is a stealth HEPS reacceleration brewing, catalyzed by pent-up reno spend soft-landing and visibility into Pro credit expansion accelerating topline + likely incremental mix/margin expansion as mortgage rates ease. Our model has diluted EPS inflecting to $14.60 in FY25E from below then to $15.60 in FY26E, +4% vs. cons, assuming early visibility into a 3.5% top line reacceleration, 30bps of MS rate expansion, and the programmatic return of shareholder repurchases (which explicit capital assumption is baked into our model and not into cons). These incremental earnings catalysts should be largely overlooked by the Street, suggesting HD's ability to reaccelerate EPS is more sustainable than bears expect, while mgmt can manage productivity and shrink to overcome lingering structural mix headwinds. With a 22.0x fwd P/E rat, just below historical median (+ premium to peers), we see fair valuation (yielding the Pro competitive advantage and capital allocation premium) but also no further upside multiple expansion until the macro crosswind tailwinds subside. If the insider selling or inflection in demand momentum catalyze, then downside risk could unfold quicker than bullish expectations, but current risk/reward favors patience vs. pushback. We see a steadily compounding mid-SDD EPS grower on HD,