Carrie Galeotafiore's Home Depot

For the purpose of this study, the researchers have opted to take the point of view of Carrie Galeotafiore, an analyst from Value Line Publishing (VLP), who specializes in the retail building-supply (RBS) industry. This perspective allows us to be knowledgeable about economic, industry, and entity specific factors relevant to this study. Moreover, it justifies our professional judgment for the resulting estimated figures used.

Case Context

The Economy

In the early 2000s, there was a decline in economic activity in developing countries. Moreover, its repercussions were also felt by developed countries, one of which is the the United States of America experienced an economic state, which showed recessionary qualities. However, in early 2002,
First, it acquired three flooring companies, which would make it the turnkey flooring supplier. Second, aforementioned in the earlier paragraphs, they have also made use of initiatives to attract professional customers. In line with this, they created their personal brand lines targeted towards the professional market. Third, unlike Lowe’s which established itself in the rural areas, Home Depot has long been in the metropolitan area. It’s form of expansion comes in the form of acquisition of EXPO Design Centers, retail shops in urban shops, and international branching, establishing itself in Canada and Mexico, through, yet again acquisition of existing chains in their respective locations. Their performance, however, due to numerous expansions and/or mismanagement, has declined, specifically, customer service and operating
In addition to this, after the creation of the pro forma forecast, the analysts have to analyze the results and create an interpretation about its implications and determine whether the companies’ stocks are overvalued.

To do this, the analysts will consider the performance and financial statement forecasting of the two leading companies of the retail building supply industry. Next, decide on how the impacts of Home Depot’s operating performance and Lowe’s stock market performance will affect their favorability in the