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Bank of America Merrill Lynch is defending Home Depot Inc. (NYSE: HD). What stands out here is not just that the firm is reiterating its Buy rating, but that it is calling for Home Depot shares to go to $100.00, implying some 25% upside, plus the company’s 2.4% dividend yield.

Friday’s rating is based on Home Depot’s relative underperformance offering a strong buying opportunity to investors.

Merrill Lynch’s Denise Chai said:

Given concerns over the speed of the housing recovery, Home Depot has significantly underperformed the market in the last 6M, rising 1.6% vs 9% for the S&P 500. As a result, HD is now trading at a slight discount to its 5-year average, and its premium to the S&P 500 has narrowed considerably. We believe recent underperformance offers an attractive opportunity in the stock.

Chai believes that Home Depot will continue to leverage a powerful combination of industry tailwinds from a housing recovery and strong renovation cycle. The following were five key reasons to buy Home Depot:

1. Multiple industry tailwinds, many in early stages
2. Internal initiatives that are driving comp growth and share gains
3. Powerful earnings leverage on continued productivity improvements
4. Strong returns with room for upside from additional leverage
5. Compelling valuation

What investors need to consider is that this $100 price target is the top price target in the Home Depot analyst coverage universe. It is also more than $10 above the consensus $89.60 price target listed by Thomson Reuters.