Home Depot (HD) Stock Forecast & Price Target

Home Depot maintains a positive outlook due to its significant market position as the world's largest home improvement specialty retailer, operating 2,356 stores with extensive product offerings and a strong online presence. The company has successfully expanded its addressable market to $1.1 trillion, demonstrating robust continued growth in both residential and professional sectors, with total sales growth projections of 2.5% to 4% year-over-year, even amid challenging housing conditions. Additionally, the strategic acquisitions of SRS and GMS are expected to enhance operational efficiencies and drive future earnings per share growth, with anticipated operating profit growth likely outpacing sales growth, thereby supporting a favorable long-term financial trajectory.

Home Depot's guidance for 2025 indicates an anticipated decline in adjusted earnings per share (EPS) of approximately 5% to $14.48, reflecting broader economic concerns as leverage on the U.S. housing stock stands at ~27%, significantly lower than the 54% seen at the start of the previous recovery in 2011. Sales projections have been downgraded, with the expected comparable sales growth reduced to 1.5% from a previous estimate of 2.0%, while operating margins are also expected to contract, signaling potential challenges in maintaining profitability amidst rising wage and capital investments. Additionally, a drop in housing turnover to ~2.9% against the long-term average of ~4.1%, coupled with decreasing employment trends, presents further headwinds to sales growth, raising concerns about the company's future financial performance.