New York, NY, September 18, 2006--Home Depot was downgraded to neutral from outperform at Credit Suisse, citing valuation and concerns over a weakening housing market.
Analyst Gary Balter also lowered his stock price target to $37 from $40. Balter said that while retail stocks have had a one-week rally, and although gas prices may have fallen, "we continue to believe that we are at the beginning of a weakening housing market, a situation that at best would lead to meeting expectations but could lead to earnings shortfalls for the most housing-related stocks we cover."
He said housing prices and spending don't start having their impact until six to nine months after housing peaks, and he doesn't believe the worst is over yet.
The home improvement retailer's stock, a component of the Dow industrials, closed Friday unchanged at $37.22, but up 8.6% on the week.
