Amid ongoing discussions about the Federal Reserve's interest rate decisions, Jim Cramer has expressed confidence in Home Depot (NYSE:HD), emphasizing its resilience and potential for success regardless of the Fed's actions.
What Happened: The "Mad Money" host highlighted Home Depot's dual nature as both a secular and cyclical stock, suggesting that it is well-positioned to thrive, CNBC reported on Tuesday.
He stated, "The company's secular characteristics carry it through the cyclical pain, so even if the Fed doesn't move with alacrity to cut rates, Home Depot will still win."
Cramer identified several secular trends that contribute to Home Depot's success, including a shortage of new homes for sale, aging homes requiring renovations, a significant number of Millennial homeowners, and substantial home equity available for improvements. He also noted the retailer's professional business arm is thriving due to the housing shortage driving up new home prices.
He further highlighted Home Depot's historical growth, noting its stock has surged over one million percent since its 1981 market debut.
"There's a boom and bust portion of the business, but for most of that period since 1981, it kept growing regardless," Cramer remarked.
Why It Matters: Home Depot's recent performance has been under scrutiny, particularly after agreeing to a nearly $2 million settlement to address allegations from California prosecutors regarding overcharging customers due to price discrepancies. The company's stock has shown signs of being overbought, with its share price nearing a key resistance point. This situation often leads to potential sell-offs.
Moreover, Home Depot's sales have recently fallen short of expectations, with revenue for the second quarter reported at $43.1 billion, down 0.6% from the previous year and missing Wall Street's consensus of $43.3 billion.
Price Action: Home Depot was trading slightly lower by 0.072% during pre-market hours on Tuesday, as per Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
