The ratings on Atlanta-based Home Depot Inc. reflect our forecast that profitability and credit measures should remain close to current levels over the near term, despite our expectations for generally flat home improvement industry demand. Financial policy remains a key rating factor. The ratings incorporate our expectation that credit ratios will eventually weaken, but remain consistent with the company's target 2.5x leverage metric and with our benchmark for an "intermediate" financial risk profile assessment (as defined by our criteria)--this is compared with the current ratio of about 2x. Home Depot's strong business risk profile reflects its no. 1 position as the largest home improvement retailer in the world, supported by its substantial U.S. store footprint, its improved profitability, and solid
