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
WACCMarket 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)
 WACCBook   7.87%  8.16%
Enterprise value
EVMarket 117,1156  186,050 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  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.
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

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/FCFOPS

\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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