03:04 PM EDT, 04/02/2024 (MT Newswires) -- Home Depot's ( HD ) decision to acquire SRS Distribution for over $18 billion presents more opportunities than risks for the company, UBS said in a note emailed Tuesday.

Despite operating SRS independently, the acquisition will help evolve Home Depot's ( HD ) perception by making it appear more legitimate in the complex projects market.

Last year, Home Depot ( HD ) outlined plans to become a one-stop source for professionals in a $200 billion market segment it termed as "complex" pro projects that require many types of products and multiple days of work.

The purchase will help Home Depot ( HD ) gain a deeper understanding of the complex pro customer segment and equip it with the tools necessary to serve the market, UBS said.

Meanwhile, the acquisition will be dilutive to Home Depot's ( HD ) fiscal 2025 earnings per share by 2.3% and then accretive by 0.2% to its fiscal 2026 EPS, the firm noted.

UBS maintained a 12-month price target of $411 for Home Depot ( HD ) with a buy rating.

Home Depot ( HD ) shares were down more than 1% in recent trading.

Price: 363.41, Change: -4.63, Percent Change: -1.26