Home Depot Inc. has seen its tool rental company with professionals in recent years, but managers say there is still room for further growth.
"We know 90% of professional rental tools, but several years ago, just about one in 10 benefits rented from us," Craig Menear, Home Depot s
HD, + 0.83%
CEO, said about the earnings call, according to a FactSet transcript. "Today, the number has improved to one in four, but there is still room for further growth as we continue to invest in our rental experience."
Home Depot said it has "the largest number of tool rental centers in North America" with about 1
Home Depot joins a number of companies that see revenue streams in rental.
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In the clothing sector, Rent the Runway has become the most well known name in rental games and has reached $ 1 billion as a result, according to The Wall Street Journal. Urban Outfitters Inc.
URBN, + 2.47%
American Eagle Outfitters Inc.
AEO, + 1.30%
and other companies also jump in.
Home Depot's optimism in this and other areas of the company is shared by analysts. The reseller dealer reported earnings that hit expectations and income that were broadly in line with expectations. However, the same sales of the US decreased 3% compared to the FactSet estimate for a 4.2% increase.
"F1Q19-comparable sales failures are understandable given the recent choppiness of the home data and concerns over the length of the US economic cycle," wrote Raymond James analysts led by Budd Bugatch. "Based on the weather-related cross-country impact of F1Q19 (February specifically), we concluded that there was some temporary noise in the results that masked stronger underlying demand."
At the call, Menear said this February "the second wettest record for the US" Planalytics, a group that monitors the company's impact on the weather, said the temperature became colder during the month, with snow and rain "prominent" in the western and central parts of the country.
"The DIY / Home Center sector has benefited from a favorable March and April to see a total weather increase for the quarter of $ 791 million over the first quarter of 2018," says Planalytics in a report.
Raymond James wagering Home Depot shares exceeds a $ 205 target price.
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Menear also discussed problems with timber.
"[L] omber prices continued to decline in the quarter, resulting in a negative impact on sales growth of about $ 200 million, he says.
Stifel analysts say timber delineation may have an impact $ 800 million a year "if prices don't rise again as they usually do in the spring."
Nevertheless, analysts have confidence in Home Depot's ability to put operational improvements in place and deliver "strong" revenue growth.  Stifel rates Home Depot buys with a $ 210 price target, up from $ 200.
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"We believe Home Depot is still one of the best long-term retail stories-specific sales and margin initiatives, the industry's duopoly / Amazon-resistant nature and a significant financial and operational leverage that EPS growth in better sales environments, "wrote JPMorgan analysts.
They maintain their overweight stocking rate and moved their price target up $ 1 to $ 204.
Home Depot stock is up 11.7% for the year to date, broadly in line with the Dow Jones Industrial Average
DJIA, + 0.37%
which achieved 9.1% for the period.