Home Depot, Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Longbow Research	David S. MacGregor	dmacgregor@longbowresearch.com
Evercore ISI	Greg Melich	greg.melich@evercoreisi.com
RBC Capital Markets	Scot Ciccarelli	scot.ciccarelli@rbccm.com
Deutsche Bank Research	Mike Baker	michael.baker@db.com
Telsey Advisory Group	Joseph Feldman	jfeldman@telseygroup.com
Piper Jaffray	Peter J. Keith	peter.j.keith@pjc.com
Nomura Research	Jessica A. Schoen	jessica.schoen@nomura.com
Consumer Edge Research	David A. Schick	dschick@consumeredgeresearch.com
Atlantic Equities	Sam Hudson	s.hudson@atlantic-equities.com
Credit Suisse	Seth Sigman	seth.sigman@credit-suisse.com
SunTrust Robinson Humphrey	Keith Hughes	keith.hughes@suntrust.com
Oppenheimer	Brian Nagel	brian.nagel@opco.com
Wolfe Research	Scott Mushkin	smushkin@wolferesearch.com
Daiwa Securities Co. Ltd.	Kahori Tamada	kahori.tamada@us.daiwacm.com
Wedbush Securities	Seth Basham	seth.basham@wedbush.com
Jefferies	Daniel Binder	dbinder@jefferies.com
Raymond James	Budd Bugatch	budd.bugatch@raymondjames.com
BMO Capital Markets	Wayne Hood	wayne.hood@bmo.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	6,826	8,663	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	7,858	8,228	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	302	353	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	31,814	29,246	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	21.46%	29.62%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	4,732	(602)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	69.32%	-6.95%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	23.86%	25.46%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.87%	8.16%
Enterprise value	EV_Market	117,1156	186,050	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	176,617	185,872
Long-Run Growth	g = IR x ROIC	14.87%	-2.06%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	12.63%	14.15%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	14.53%	12.85%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	2.13	1.98	24.39%	24.69%	24.05%	25.24%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	14.42	12.16	24.39%	24.69%	24.05%	25.24%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	25.95	21.48	24.39%	24.69%	24.05%	25.24%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	22.54	22.61	24.39%	24.69%	24.05%	25.24%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	16.87	13.96	24.39%	24.69%	24.05%	25.24%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	5.57	6.36	24.39%	24.69%	24.05%	25.24%

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