Home Depot

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Analyst Listing       Primary Input Data
Derived Input Data       Valuation Model Outcomes

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 177,156 186,050  EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook 176,617  185,872
EV/EBIT Multiple \frac{EV_{Market}}{EBIT}  16.87 13.96 EV/EBIT\,=\,\frac { EV}{ EBIT}
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%

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Valuation Model Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs and, depending on the equational form of any particular valuation model, may result in irrelevant or implausible results.  For example, in the event WACC < g, the value of this term, often found in the denominator of an equation’s continuation value term, will be expressly negative and may result in a negative overall valuation for the firm.  In the event of a WACC < g relation, the model form as applied to the subject firm offers an irrelevant outcome.

Valuation Model Type

Label

Equational form
Key Value Driver (NOPLAT) KVD (NOPLAT) { Value }_{ DCF/KVD }=\sum { \frac { NOPLAT_{ t } }{ { \left( 1+WACC \right) }^{ t } } +\frac { \frac { { NOPLAT }_{ 1 }\left( 1-\frac { g }{ ROIC } \right) }{ WACC-g } }{ { \left( 1+WACC \right) }^{ t } } }
 
Key Value Driver (FCF) KVD (FCF)
{ Value }_{ DCF/KVD }=\sum { \frac { FCF_{ t } }{ { \left( 1+WACC \right) }^{ t } } +\frac { \frac { { NOPLAT }_{ 1 }\left( 1-\frac { g }{ ROIC } \right) }{ WACC-g } }{ { \left( 1+WACC \right) }^{ t } } }
 
Free Cash Flow FCF { Value }_{ DCF/FCF }=\sum { \frac { FCF_{ t } }{ { \left( 1+WACC \right) }^{ t } } +\frac { \frac { { FCF }_{ 1 }}{ WACC-g } }{ { \left( 1+WACC \right) }^{ t } } }
 
Economic Profit ECON π { Value }_{ { ECON\pi } }= I{ C }_{ 0 }+\sum { \frac { { IC }_{ t-1 }(ROI{ C }_{t}-WAC{C}_{t}) }{ { \left( 1+WACC \right) }^{ t } }+ \frac {\frac { I{C}_{0}\ x\ (ROI{C}_{1}\ -\ WAC{C}_{1}) }{ WACC-g } }{ { \left( 1+WACC \right) }^{ t } } }
 
Adjusted Present Value APV { Value }_{ APV }=\sum { \frac { FCF_{ t } }{ { \left( 1+{ k }_{ u } \right) }^{ t } } +\frac { \frac { { FCF }_{ 1 }}{ { k }_{ u }-g } }{ { \left( 1+{ k }_{ u } \right) }^{ t } } } +\sum { \frac { { TS }_{ t } }{ { \left( 1+{ k }_{ tax } \right) }^{ t } } +\frac { \frac { { TS }_{ 1 }}{ { k }_{ tax }-g } }{ { \left( 1+{ k }_{ tax } \right) }^{ t } } }
 
Forward Market Multiple FMM { Value }_{ DCF/FMM}=\sum { \frac { FCF_{ t } }{ { \left( 1+WACC \right) }^{ t } } +\frac { { EBIT }_{ 1 }\,{x}\,{FMM}}{ { \left( 1+WACC \right) }^{ t } } }{\,\,\,; \,\,FMM\,=\,\frac{{EV}_{t=0}}{{EBIT}_{t=0}}}
 

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