Key Stats for Home Depot Stock
- Price Change: 1.99%
- Current Price: $384.48
- Street Target Price: $402.88
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What Happened?
Home Depot (HD) is navigating a deeply frozen housing market, with its shares trading near the $384.48 level as investors digest a highly specific, yet cautious fourth-quarter earnings release.
The home improvement giant reported full-year sales of $164.7 billion, representing a modest 3.2% increase.
However, CFO Richard McPhail outlined a difficult path for 2026, projecting comparable sales growth of just flat to 2% and warning that first quarter EPS will actually decline in the mid single digits as the company absorbs annualization costs from its recent GMS acquisition.
McPhail pointed directly to a structural gridlock in the U.S. residential real estate market as the primary headwind.
With mortgage rates hovering near 6% and home prices up over 50% since 2019, housing turnover has collapsed to historic, multi-decade lows.
This stagnation severely pressures demand for “big ticket” discretionary projects like major kitchen and bath remodels, forcing consumers to focus almost exclusively on basic maintenance and repair.
Because management sees no immediate catalyst for a housing inflection, CEO Ted Decker is shifting the company’s growth engine aggressively toward the professional contractor market to capture whatever market share remains.
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Is Home Depot Undervalued Today?
The Wall Street Consensus indicates that the market is already pricing in this cyclical housing trough, creating an attractive entry point for long-term investors who recognize the strength of the company’s underlying fundamentals.
Analysts project a Street Target Price of $402.88, representing a steady 4.8% upside from current levels.
While the broader Do-It-Yourself (DIY) market remains heavily pressured, Home Depot’s “Pro” ecosystem is evolving into a massive, highly resilient growth engine.
The company has successfully integrated new capabilities like trade credit lines, AI-powered project blueprint takeoffs, and enhanced real-time job site delivery tracking to win over heavy-duty contractors.
CEO Ted Decker detailed exactly how this strategic focus on the professional segment is directly offsetting the broader macroeconomic weakness.
Decker stated verbatim: “Pros who are utilizing our Pro ecosystem of capabilities are spending more with us, and we remain focused on enhancing our capabilities from sales support to project management to delivery, all to better support Pros throughout the life of their projects.”
Read the full Home Depot Transcript on TIKR to see the revenue breakdown >>>
Valuation Deep Dive
The Wall Street Consensus Target identifies Home Depot as a best-in-class operator leveraging strategic acquisitions to dominate the professional market during a prolonged housing slump.
- Target Price: $402.88
- Current Price: $384.48
- Potential Return: 4.8%
The SRS and GMS Acquisitions: To combat the stagnation in residential housing turnover, Home Depot has aggressively expanded its total addressable market through massive B2B acquisitions, specifically targeting SRS Distribution and GMS. Despite a brutal fourth quarter for the broader roofing industry, which saw total shipments plummet 28% year over year to their lowest volumes since 2019, SRS still successfully captured market share. Management expects this division to deliver highly accretive mid-single-digit organic sales growth throughout 2026.
Capital Returns and Shareholder Value: Despite the cautious demand environment, Home Depot remains a massive cash-generating machine operating at a healthy 33.3% gross margin. The Board of Directors just approved a 1.3% increase to the quarterly dividend, bringing the annualized payout to $9.32 per share. With a clear path to generating excess cash by the first half of 2027 to resume aggressive corporate share repurchases, the company is fundamentally equipped to reward shareholders while waiting for the inevitable multiyear housing recovery.
Conclusion: A dominant retail giant successfully pivoted its strategy to combat a frozen housing market. Home Depot offers a highly defensive 4.8% projected return potential. The path to the $402.88 street target is supported by outsized growth in the Pro contractor segment, accretive B2B acquisitions, and a bulletproof dividend yield.
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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!
