Key Stats for HD Stock
- Year-to-Date Performance: 8%
- 52-Week Range: $326 to $427
- Valuation Model Target Price: $463
- Implied Upside: 25%
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What Happened?
The Home Depot, Inc. stock is up about 8% year to date, recently trading near $371 per share, as investors responded positively to steady earnings results, reaffirmed 2026 guidance, and improving sentiment around housing stabilization.
Shares closed at $370.81 on March 2, with momentum building as capital rotated back into large-cap retailers with durable cash flow and dividend support.
The stock moved higher because results confirmed that demand is stabilizing rather than deteriorating, and guidance signaled resilience despite housing turnover remaining near multi-decade lows.
Fiscal 2025 sales rose 3.2% to $164.7 billion with comps up 0.3%, and while fourth quarter sales declined 3.8% to $38.2 billion due to last year’s 53rd week, underlying Q4 comps were positive 0.4%.
Adjusted fourth quarter EPS came in at $2.72 versus $3.13, and management reaffirmed 2026 guidance for 2.5% to 4.5% total sales growth and flat to 4% EPS growth, reinforcing expectations for stabilization rather than further contraction.
This week, CEO Ted Decker said that “storm activity in January provided a sales benefit in the quarter,” while highlighting positive Pro comps, big-ticket transactions over $1,000 rising 1.3%, and online sales increasing approximately 11% in Q4.
Gross margin was 32.6%, down 20 basis points year over year, and operating margin was 10.1%, reflecting mix impact from acquisitions and operating deleverage in a pressured demand environment.
However, 2026 guidance calls for operating margin of 12.4% to 12.6%, signaling confidence in cost control and integration execution.
Institutional activity remained active. Laurel Wealth Advisors reduced its position by 99.7%, while American Century Companies trimmed its stake by 21.5%.
At the same time, Bedell Frazier Investment Counselling increased its stake by 76.2%, TIAA Trust National Association raised its position by 23.7%, Handelsbanken Fonder AB added 23.9%, Rafferty Asset Management increased its stake by 24.6%, and Allianz SE raised its position by 8.4%.
Institutional ownership stands at approximately 70.86%, and the mixed positioning suggests selective accumulation as confidence in a 2026 stabilization builds.
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Is HD Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 4%
- Operating Margins: 13%
- Exit P/E Multiple: 23x
Revenue is projected to rise from $164,683 million in fiscal 2026 to $198,625 million by fiscal 2031, reflecting steady Pro demand, modest housing turnover improvement, and incremental contribution from acquisitions rather than a sharp cyclical rebound.
Operating margins near 13% assume pricing discipline, inventory productivity gains, and continued mix benefits from higher-ticket Pro projects.
The most important driver this year is housing transaction activity. Even a modest improvement in existing home sales typically unlocks deferred renovation demand in kitchens, flooring, roofing, and structural repair, categories where Home Depot maintains strong market share.
Continued expansion of the Pro ecosystem, including jobsite delivery reliability, trade credit penetration, and cross-selling across SRS and GMS, supports higher ticket sizes and repeat purchasing behavior.
Digital momentum also matters. With over 50% of online orders fulfilled through stores and online sales up approximately 11% in Q4, improvements in delivery tracking, order management, and AI-enabled Pro tools can enhance conversion and customer lifetime value without requiring broad-based housing acceleration.
Based on these inputs, the valuation framework implies a target price of $463, representing approximately 25% upside into 2026.
At current levels, Home Depot appears modestly undervalued, with performance in 2026 likely driven by housing stabilization, Pro market share gains, disciplined capital allocation, and margin resilience rather than aggressive top-line growth.
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How Much Upside Does HD Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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