Think Home Depot Stock Is Expensive? This Chart Might Change Your Mind

Group 1 - Lower interest rates are expected to improve the prospects for Home Depot, as they will positively impact the housing market and existing home sales [1][4] - Home Depot's earnings trajectory is closely tied to existing home sales, with trends in earnings before interest and taxation (EBIT) reflecting the state of the housing market [2] - Current EBIT figures for Home Depot may lag behind immediate changes in existing home sales, indicating that current earnings are a reflection of past housing market conditions [2] Group 2 - As existing home sales improve, driven by lower interest rates, investors will likely begin to anticipate an improvement in Home Depot's earnings, potentially leading to a perception of current valuations as expensive [4] - While Home Depot may not be as expensive as perceived, other companies like Owens Corning, which has made strategic acquisitions, may present more attractive investment opportunities [5] - Whirlpool is also highlighted as a company to watch, as it faces challenges with sales and margins but could benefit from an improving housing market that encourages consumer spending on major appliances [5]