Home Depot (HD) Stock Forecast & Price Target

Home Depot's strong performance indicators include a 2.4% increase in ticket size in 4Q25, reflecting strategic pricing and a shift towards higher-ticket products, which positions the company favorably within a fragmented building materials market. The total addressable market was expanded to $1.2 trillion, inclusive of the HVAC segment, supported by a robust 50% increase in home values since 2019 and an anticipated 14% year-over-year rise in existing home sales for 2026. Additionally, Home Depot's earnings per share (EPS) estimates for 2027 have been raised to $16.57, backed by a projected 3.5% comparable store sales growth and improved operating margins of 13.1%.

Home Depot's financial performance reveals a concerning trend, with a reported 3.8% decrease in sales to $38.2 billion, coupled with weaker-than-anticipated comparable store sales growth, particularly in the US, which stood at 0.3% against expected figures of 1.5%. Additionally, the company faced a contraction in both adjusted operating margin and gross margin, reflecting operational challenges in a competitive market, particularly as the home improvement sector showed mixed results among key competitors. Furthermore, persistent issues such as high mortgage rates and elevated home prices continue to hinder housing affordability, exacerbating the lack of positive catalysts for growth.