The Home Depot (NYSE:HD) announced its largest acquisition to date, acquiring SRS Distribution for $18.25 billion, which includes debt. The deal is anticipated to finalize by year-end. Although the acquisition is projected to impact earnings-per-share (EPS) negatively from a Generally Accepted Accounting Principles (GAAP) stance due to amortization expenses, Home Depot anticipates that it will have a positive impact on cash EPS in the first year following the closing date, excluding synergies.
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SRS is a residential specialty trade distribution company. Home Depot anticipates that this acquisition will boost its growth with the residential professional customer, enhancing the home improvement retailer’s service for complex projects and establishing it as a top trade distributor.
Additionally, Home Depot believes that with this deal, its total addressable market will be now around $1 trillion, an increase of around $50 billion.
Is HD a Good Stock to Buy?
Analysts remain cautiously optimistic about HD stock with a Moderate Buy consensus rating based on 18 Buys, seven Holds, and two Sells. Over the past year, HD stock has surged by more than 40% and the average HD price target of $381.35 implies a downside potential of 1.2% at current levels.
