Home Depot lands on Evercore's Best Core Ideas list with nesting trends still strong

• Home Depot (NYSE:HD) is one of Evercore ISI's Best Core Ideas for 2022. The firm's list includes the top picks on a longer than one-year timeframe.
• Analyst Greg Melich says Home Depot is on track for sales productivity 30% higher in 2022 than 2019. If Nesting trends and share gains hold, HD’s margins are expected to be flat this year, which makes Evercore buyers as Home Depot proves its compounder status.
• "HD is a best-in-class operator in a competitive, rational duopoly, with upside from growth, FCF and strong ROIC. The multiple is back at a 20% premium to the market, but returns, margins, and earnings are moving up this year."
• Accelerated investments by Home Depot are noted to be in past now, and strong customers, multichannel momentum and a larger impact from the Pro business are seen helping HD keep its market share gain from the past few years.
• "On the macro side, given the steady project momentum, increasing pro trends, rising home prices and the ageing housing stock, we remain in the more bullish camp. When the market sees how much of the uplift is sustainable into 2022 and 2023, we think the $16bn+ of growing FCF will shine through ."

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