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Jim Cramer identified The Home Depot, Inc. (NYSE: HD) as a primary laggard in the Dow Jones Industrial Average, attributing the stock's decline to high interest rates rather than fundamental weakness.
In an October 1 discussion, Cramer noted that the Dow's constituents finished the third quarter down 2.7%, with Home Depot falling 19% and McDonald's dropping 15%.
He described Home Depot as a "bad pick" for his Charitable Trust but refrained from selling the position, stating that the company remains a "hostage to interest rates" and will not see relief until borrowing costs decrease.
The valuation gap between Home Depot and its primary rival highlights the market's hesitation. The stock trades at approximately 19 times forward earnings, a premium of roughly 27% over Lowe's Companies, Inc.
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