NEW YORK ( Trefis) -- Home Depot's ( HD) market share in home-improvement product categories like plumbing, electrical and kitchen has remained relatively stable over the past few years, in the range of 21% to 22% despite competition from Lowe's ( LOW).

A high penetration level in the U.S. market has helped Home Depot offset losses from the hard-hit housing markets in southern California and Florida.

Trefis expects Home Depot to maintain its No. 1 position in the plumbing, electrical and kitchen market and continue its gradual market share improvement alongside a broad recovery in the housing market.

While Trefis expects a gradual growth in Home Depot's market share in plumbing, electrical and kitchen products to roughly 23% by the end of Trefis' forecast period, Trefis community members predict this share will cross 26%, which suggests an upside of 5% to the Trefis price estimate for HD's stock.

Trefis currently has a $36.65 price estimate for Home Depot stock, in line with market price.

Home Depot generates more than one-fifth of the total plumbing, electrical and kitchen product sales in the U.S. and Canada. The company enjoys a well-known brand name and large customer base. At the end of 2009, even after discontinuing its nearly 60 Expo and HD supply stores, Home Depot had more than 450 more stores than Lowe's in the U.S. and Canada combined. With Home Depot's high customer penetration, its competitors will find it difficult to eat into the company's market share.

Consumer demand in the home-improvement space is typically driven by price and quality. Increasingly, consumers are also turning towards green and eco-friendly home products such as water saving flushes and electricity saving lights that can lower utility bills. Home Depot has an efficient global product sourcing system which gives it an edge over competitors and independent stores, facilitating its ability to distribute a wide range of innovative products.

The Trefis community predicts that Home Depot's share in plumbing, electrical and kitchen improvement products will increase from 22% in 2010 to over 26% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase to 23% during the same period.

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