2024-04-02 03:11:00 ET
According to a Bank of America analyst, home improvement retailer Home Depot (NYSE: HD) stock has slightly more than 10% upside potential. The analyst retained a buy rating on the stock and raised the price target to $425 from $400 following the announcement to buy SRS Distribution for an enterprise value, or EV, (market cap plus net debt) of $18.25 billion.
Looking into the deal's details, SRS is a residential specialty trade distribution company focused on the professional roofing, landscape, and pool markets. It generated $1.1 billion in earnings before interest, taxation, depreciation, and amortization ( EBITDA ), implying an enterprise value (EV) to EBITDA multiple of 16.1.
As you can see below, that's not a historically attractive multiple in this industry.
For further details see:
Home Depot Stock Has 10% Upside, According to 1 Wall Street Analyst