With Home Depot shares briefly touching an all-time high of $139 on Tuesday, CEO Craig Menear doesn't see the company's fortunes stalling anytime soon.
Supported by strength in the housing market — which is being driven by rising home values and household formation — the chief executive sees opportunities to further grow its business across the millennial and aging consumer populations, as well as with the professional customer.
"We've been fortunate that we're in a space where customers are willing to spend," Menear told CNBC's "Closing Bell."
That's particularly true as owners stay in their homes longer. With roughly 4.6 months' supply of houses on the market (compared with the historical norm of about six months), consumers' lengthier nesting periods are encouraging them to spend additional cash on upgrades, Menear said.
"If people aren't moving they're clearly investing in their homes," the CEO said. "That is a project driver."
And despite millennials' reluctance to buy homes, Menear said the retailer is starting to see some "positive signs" emerging from the consumer group. Over the past several quarters, about 35 percent of new household formation has come from the tail end of millennials as it relates to homes, he said. That's despite a U.S. Census Bureau report last week, which said the homeownership rate here fell to its lowest level since 1965.
Menear reiterated that the millennial cohort appears to be on a six-year delayed cycle in terms of household formation. In that vein, UBS analyst Michael Lasser said in a separate interview with CNBC on Monday that the generation should start to play a bigger role in Home Depot's revenues over the next five to 10 years.
And as the baby boomer generation ages, Home Depot is likewise investing in what it calls its "do-it-for-me" business. That includes its services unit and the professional customer, Menear said.
Despite falling in sympathy with a broader market pullback on Tuesday, Home Depot shares are up more than 17 percent over the past year. But Stifel analyst John Baugh said they still have room to run.
In a note to investors initiating coverage on the retailer, Baugh placed a buy rating and $157 target price on Home Depot's stock. He sees a "bullish backdrop" of home improvement spending and an "impressive" financial model as two catalysts for the company moving forward, he said.
"The [home improvement] industry is still only in the middle innings of a recovery in home remodeling projects, and Home Depot is well-positioned to exploit this opportunity," Baugh said.