It’s time to maneuver to the sidelines on Home Depot , in response to Credit Suisse. Analyst Karen Short assumed protection of Home Depot with a impartial score, with a earlier score of outperform, saying the slowing housing market spells hassle for the house enchancment retailer. “Our general view is that HD story offers a healthy balance of reasons to be positive longer term but cautious in the near term,” Short wrote in a Monday word. The analyst cited a number of causes for her cautious outlook, together with declines in each the inventory market and residential costs that might create a “negative wealth effect” that delays or cancels house enchancment tasks for shoppers. The S & P 500 is down about 19% this 12 months. Meanwhile, house costs stay elevated, however are down 8% from their June 2022 peak, in response to the word. “A forecast from the Dallas Fed suggests that the price correction could reach as much as 15-20% in a pessimistic scenario. Therefore, further declines in the stock market and home prices could weigh on demand for home improvement projects,” Short wrote. However, the story for Home Depot stays constructive over the long run, in response to the word. The analyst stated Home Depot and Lowe’s collectively share 25% of the house enchancment retail business, which means the 2 retailers are just a little extra insulated from pricing pressures in an inflationary setting. “As a result, even if the backdrop becomes a little more challenging, we would expect pricing and promotions to remain largely rational given that: a. The largest operators are EDLP retailers; b. The industry has some oligopolistic features within retail; c. Demand for non-discretionary home improvement projects has been relatively inelastic,” learn the word. Shares of Home Depot are off greater than 23% this 12 months. The analyst’s $335 value goal, lower from $390, is about 5% above the place shares closed Monday. —CNBC’s Michael Bloom contributed to this report.