Terrence, enough of the 'emotional' red herring! My comments on proactive vs reactive change hardly fit the definition of 'emotional'.
If you want technical observations, consider that HD is up over $3, +5.4% on higher volume than previous day and 1.4 times the 20-day average volume. This is not indicative of an expectation of a major earnings failure. Technically, it looks pretty decent, like a successful test of a significant support level near $55. Failure to fall through this double bottom of January and February can indicate potential for strong rebound.
Further, consider this report today from Paine Webber:
"5/11/99 3:10 pm... HOME DEPOT (HD 59) UP 2-5/8, PAINEWEBBER UPGRADES TO ATTRACTIVE FROM NEUTRAL... Analyst Aram Rubinson tells salesforce raises $1.30 FY 00 (Jan) EPS estimate to $1.32, $1.55 to FY 01 to $1.63... Raises 20% growth rate forecast to 23%... Says stock trading at 43x FY 00 EPS estimate... But with comparable returns to STAPLES, WAL MART, COSTCO, KOHL'S, GAP, and a growth rate that is at least as high, believes shares look attractive... Has $67 12-month target, assumes P/E multiple of 41x FY 01 EPS estimate."
Certainly a $67 target is not outrageous, since it's less than 15% from today's price and even with the price of April 9th. So modest a target would not grab me to buy HD if I did not already own it. Nonetheless, it's close to 100% above your earlier stated $35 downside target.
Now a $35 target -- that does strike me as close to being an 'emotional' response. |
