Key Stats for Home Depot Stock
- Pre-Market Price change for Home Depot stock: 3%
- $HD Share Price as of Feb. 23: $377
- 52-Week High: $427
- $HD Stock Price Target: $400
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What Happened?
Home Depot (HD) delivered solid earnings on Tuesday, but the stock’s modest 3% gain suggests investors remain cautious about the home improvement giant’s near-term outlook.
- The company reported adjusted earnings of $2.72 per share for the fourth quarter, comfortably ahead of the $2.54 Wall Street expected.
- Revenue came in at $38.2 billion, slightly topping estimates of $38.12 billion. This marked Home Depot’s first earnings beat in four quarters.
- Despite the beat, sales actually declined 3.8% year over year. However, this looks worse than it is because last year’s fourth quarter included an extra week, which added $2.5 billion in sales. When adjusted for this calendar difference, the business showed modest stability.
- Home Depot maintained its fiscal 2026 guidance, projecting sales growth of 2.5% to 4.5% and comparable sales ranging from flat to up 2%.
- The company expects adjusted earnings per share to grow anywhere from flat to up 4% from $14.69 in fiscal 2025.
CFO Richard McPhail told CNBC that consumers and the company have “been in a frozen housing environment for three years” with no meaningful thaw in sight.
He pointed to rising consumer uncertainty and declining confidence as key headwinds, with customers expressing concerns about housing affordability and potential job losses.
The housing market remains challenging for Home Depot. Higher interest rates over the past few years have kept homeowners from moving, which typically triggers larger home improvement projects.
Mortgage rates have started to come down, with 30-year fixed rates hitting 5.99% recently, the lowest since 2022. But it’s unclear if this will be enough to jumpstart demand.
Tariff uncertainty adds another layer of complexity. After the Supreme Court ruled some Trump administration tariffs illegal, President Trump proposed a 15% across-the-board global tariff.
McPhail said Home Depot is “still in the middle of our analysis” and noted that more than half of what the company sells comes from the U.S.
The company is also diversifying imports so no single country outside the U.S. represents more than 10% of purchases.
There are some bright spots. The professional contractor business continues to outperform the do-it-yourself segment. Home Depot’s recent acquisitions of SRS Distribution ($18.25 billion) and GMS ($4.3 billion) have strengthened its position with contractors, roofers, and other building professionals.
The company also announced a 1.3% dividend increase to $2.33 per share quarterly, marking the 156th consecutive quarter of dividend payments.
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What the Market Is Telling Us About Home Depot Stock
The muted stock reaction suggests investors aren’t convinced the worst is over for Home Depot.
While the earnings beat is encouraging after three straight misses, the company’s cautious outlook and ongoing challenges in the housing market are keeping expectations in check.
Home Depot stock is down about 2% over the past year but up 9% year to date, underperforming the S&P 500’s nearly 14% gain over the past year.
The stock’s valuation and the company’s strong market share gains are positives, but investors will likely need to see mortgage rates drop further and consumer confidence improve before getting more bullish on the shares.
For long-term investors, Home Depot’s dividend growth, professional business strength, and eventual housing market recovery could make current levels attractive. But in the near term, expect continued volatility as the company navigates economic uncertainty.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
