It’s time to move to the sidelines on Home Depot , according to Credit Suisse. Analyst Karen Short assumed coverage of Home Depot with a neutral rating, with a previous rating of outperform, saying the slowing housing market spells trouble for the home improvement retailer. “Our general view is that HD story offers a healthy balance of reasons to be positive longer term but cautious in the near term,” Short wrote in a Monday note. The analyst cited several reasons for her cautious outlook, including declines in both the stock market and home prices that could create a “negative wealth effect” that delays or cancels home improvement projects for consumers. The S & P 500 is down about 19% this year. Meanwhile, home prices remain elevated, but are down 8% from their June 2022 peak, according to the note. “A forecast from the Dallas Fed suggests that the price correction could reach as much as 15-20% in a pessimistic scenario. Therefore, further declines in the stock market and home prices could weigh on demand for home improvement projects,” Short wrote. However, the story for Home Depot remains constructive over the long term, according to the note. The analyst said Home Depot and Lowe’s together share 25% of the home improvement retail industry, meaning the two retailers are a little more insulated from pricing pressures in an inflationary environment. “As a result, even if the backdrop becomes a little more challenging, we would expect pricing and promotions to remain largely rational given that: a. The largest operators are EDLP retailers; b. The industry has some oligopolistic features within retail; c. Demand for non-discretionary home improvement projects has been relatively inelastic,” read the note. Shares of Home Depot are off more than 23% this year. The analyst’s $335 price target, cut from $390, is about 5% above where shares closed Monday. —CNBC’s Michael Bloom contributed to this report.