Home Depot (HD) Stock Forecast & Price Target

Home Depot, the largest home improvement retailer, has successfully integrated recent acquisitions such as SRS and GMS, enhancing its servicing capacity in the professional market, which is reflected in significant increases in contractor spending and overall market demand. With the total addressable market for home improvement expanding to $1.1 trillion, Home Depot currently holds a 15% market share, indicating room for growth, particularly within the complex pro sector. The company anticipates steady sales growth of 2.5% to 4% year-over-year, coupled with operating profit growth surpassing sales increases, positioning it well for future earnings per share expansion.

Home Depot has maintained its guidance for 2025, projecting a decline in adjusted EPS by approximately 5% to $14.48, while indicating a concerning reduction in leverage on the U.S. housing stock to about 27%, significantly lower than the 54% observed during the last recovery in 2011. The company's 2026 earnings per share estimate has been revised downward to $15.00 from $15.50, reflecting reduced comparable sales growth expectations and anticipated operating margin contraction. Additionally, a marked decrease in housing turnover to around 2.9% in 2025, coupled with rising wage and capital investments, poses challenges for profitability, further supported by the negative correlation between employment trends and retail sales.