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Commanding a market cap of $408.8 billion, The Home Depot, Inc. (HD) is a leading American home improvement retailer specializing in a wide range of products for construction, home renovation, appliances, and services. Founded in 1978 and headquartered in Atlanta, Georgia, it operates more than 2,300 stores across the U.S., Canada, and Mexico.
HD shares have trailed the broader market considerably over the past year. HD has gained 16.5% over this time frame, while the S&P 500 Index ($SPX) has rallied 22.6%. However, in 2025, shares of HD surged 6.4%, surpassing SPX’s 3.1% rally on a YTD basis.
Narrowing the focus, HD has also underperformed the Consumer Discretionary Select Sector SPDR Fund (XLY). The exchange-traded fund has climbed about 31.1% over the past year.
Home Depot has lagged behind the broader market over the past year due to a slowdown in the housing market, reduced consumer spending on big-ticket items, increased competition, and the impact of higher interest rates. Additionally, supply chain and cost challenges have weighed on its performance.
However, shares of Home Depot rose 3.3% on Jan. 15, following news that the core Consumer Price Index (CPI) for December came in lower than expected. The broader market rally was driven by the positive economic implications of falling inflation, with Home Depot seen as a potential significant beneficiary.
For the current fiscal year, which ended in Jan. 2025, analysts expect HD’s EPS to grow marginally to $15.12 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 36 analysts covering HD stock, the consensus rating is a “Strong Buy.” That’s based on 26 “Strong Buy” ratings, one “Moderate Buy,” eight “Holds,” and one “Strong Sell.”
This configuration is more bullish than three months ago, with 25 analysts suggesting a “Strong Buy.”
On Nov. 14, Stifel Financial Corp. (SF) raised its price target on Home Depot to $405 from $400, maintaining a “Hold” rating.
The mean price target of $434.44 represents a 5% premium to HD’s current price levels. The Street-high price target of $500 suggests an ambitious upside potential of 20.8%.
