Where Will Home Depot Stock Be in 3 Years?
Cyclical downturns are an unavoidable aspect of competing in the home-improvement world. Consumers reduce their spending trends in response to things like slowing economic growth, rising interest rates, and inflation. Then they tend to allocate more cash toward these discretionary home purchases when they're feeling more optimistic about their personal finances.
These economic pressures are all contributing to the sales pressures Home Depot (NYSE: HD) and its rivals are feeling today. But the retailer has endured many cyclical slumps through its time leading the industry and has always emerged from these periods to set new annual sales and earnings records. With that big picture in mind, let's zoom out and look at Home Depot's prospects over the next several years.
Everything investors know so far points to a challenging period ahead for the retailer at least through the end of 2023. Management in mid-August affirmed their outlook calling for sales to decline by between 2% and 5% this year, roughly erasing 2022's 4% increase. The chain is seeing the same pressures affecting peers across the retailing industry, from Target to Best Buy, as spending shifts away from discretionary purchases and more toward essentials.
Source Fool.com
