Wells Fargo reports back on virtual investor meetings held with Home Depot (NYSE:HD) CFO Richard McPhail and other execs.
The firm says the talks reinforced its view that recent tailwinds appear sustainable, 1H margin headwinds can improve, and outsized share gains can continue via enhanced Pro offerings, category initiatives and expanding supply chain capabilities.
“With sustainability questions and tough FY21 compares entering the narrative, we continue to view the home improvement category among the highest quality in retail, and with HD shares – 10% off recent highs (-7% SPX), we see an attractive entry point. In our view, recent share gains can accelerate (vs. fragmented, underinvested competition), macro/housing remains robust (turnover, rates, etc.), and de-urbanization and wallet share shifts remain incremental.”
For investors, the math still works out for snapping up shares, per the WF analyst team.
“At 22x, we see an entry point. HD’s NTM P/E shed 2.5x turns
Grupo Aval Looks Attractive Ahead Of An Earnings Recovery As It Absorbs Pandemic Impacts (NYSE:AVAL)
Mohamed El-Erian recently highlighted a perceived disconnect between emerging market stocks (EEM) and fundamentals on Twitter.
The rebounding emerging markets index is every bit as peculiar as the sharp rebound in domestic indices since the lows of earlier this year, which, despite not showing quite as impressive of a rebound as the S&P 500 (SPY), is astonishingly close to flat for 2020.
Looking deeper at performance in the United States reveals that, while a large swath of the stock market has showed a substantial recovery from the March lows, some parts have benefited more than others. The equal weight S&P 500, for instance, remains lower on the year, and the mid-cap and small-cap indices have performed substantially worse.
The performance of emerging markets also requires investors to look somewhat beneath the surface. Asian emerging markets, which dominate the index, have largely recovered, driven in