Contractor survey shows tradesmen feel pretty good — an encouraging sign
A new survey of painters and remodelers’ feelings about the economy and the challenges ahead bodes well for Home Depot . U.S. contractors see signs of stability even with uncertainty in the housing markets, according to Morgan Stanley’s poll of 94 general contractors, painters, and remodelers, and 37 specialist painters. The majority of the respondents expect to see business improve, analysts said, noting that a large number also reported a healthy backlog of projects and anticipate more in the latter half of 2025. The contractors cited a rebound in demand for larger projects, with few worried about clients trading down to smaller jobs. Despite the good news, contractors flagged material pricing due to inflation and tariff uncertainty as a major concern. Morgan Stanley said that while the tariffs were the third greatest business concern, the survey was conducted right before the April 2 “Liberation Day announcement, and the results could be understating contractors’ current levels of worries about tariffs. Morgan Stanley lowered Home Depot’s target price to $410 per share from $450. HD YTD mountain Home Depot YTD In a statement to CNBC on April 11, two days after Trump paused “reciprocal tariffs pause, Home Depot said, “We, together with our vendors, are monitoring developments and will work closely to manage, with the goal of being our customers’ advocate for value.” When we reached out on Monday, the company did not offer new comments on the status of tariff impact, stating they are in a “quiet period until earnings on May 20.” Before Trump’s “reciprocal” tariff announcement, Home Depot remained steadfast and confident that its business would fare well despite the larger economic backdrop. In a March interview with Jim Cramer, Home Depot CEO Ted Decker said that the company would work through whatever happened. Decker argued that more than half of existing U.S homes are over 40 years old and will need improvements. “The amount of work and upkeep you need to make on those houses, they’ve gained in value, but they need a lot of work. And we’re the place to go to help people do that,” he said. Bottom line Jim Cramer has encouraged investors to stay “long on Home Depot ,” reflected in our buy-equivalent 1 rating on the stock. Jim sees 30-year fixed-rate mortgages below 6.5% as a historical threshold that sparked housing activity, which could translate over to Home Depot’s sales. The Club added to our Home Depot position several times in March, the most recent was at the end of that month. Serving professional customers is one of the most important parts of Home Depot’s overall growth strategy, which was on display with its $18.25 billion acquisition of SRS Distribution completed in June. Pro sales were stronger than do-it-yourself for the fourth quarter 2024, which was reported back in February . (Jim Cramer’s Charitable Trust is long HD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you…
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