It is time to transfer to the sidelines on Residence Depot , in keeping with Credit score Suisse. Analyst Karen Brief assumed protection of Residence Depot with a impartial score, with a earlier score of outperform, saying the slowing housing market spells bother for the house enchancment retailer. “Our basic view is that HD story provides a wholesome stability of causes to be constructive long run however cautious within the close to time period,” Brief wrote in a Monday observe. The analyst cited a number of causes for her cautious outlook, together with declines in each the inventory market and residential costs that would create a “damaging wealth impact” that delays or cancels residence enchancment tasks for customers. The S & P 500 is down about 19% this 12 months. In the meantime, residence costs stay elevated, however are down 8% from their June 2022 peak, in keeping with the observe. “A forecast from the Dallas Fed means that the value correction might attain as a lot as 15-20% in a pessimistic state of affairs. Subsequently, additional declines within the inventory market and residential costs might weigh on demand for residence enchancment tasks,” Brief wrote. Nonetheless, the story for Residence Depot stays constructive over the long run, in keeping with the observe. The analyst stated Residence Depot and Lowe’s collectively share 25% of the house enchancment retail trade, which means the 2 retailers are somewhat extra insulated from pricing pressures in an inflationary surroundings. “In consequence, even when the backdrop turns into somewhat tougher, we might anticipate pricing and promotions to stay largely rational provided that: a. The biggest operators are EDLP retailers; b. The trade has some oligopolistic options inside retail; c. Demand for non-discretionary residence enchancment tasks has been comparatively inelastic,” learn the observe. Shares of Residence Depot are off greater than 23% this 12 months. The analyst’s $335 worth goal, minimize from $390, is about 5% above the place shares closed Monday. —CNBC’s Michael Bloom contributed to this report.