Home Depot (HD) Stock Forecast & Price Target

Home Depot is supported by its scale leadership in home improvement, with 2,364 stores, over 30,000 in-store products, and a rapidly expanding digital platform that already generates over $25B in sales, while its operating sophistication and supply chain help it convert that scale into resilient earnings quality. The company is strengthening its fundamental growth engine through the Pro ecosystem, where it has only about 15% share in a roughly $600B market, and recent acquisitions—HD Supply in 2020, SRS in 2024, and GMS in 2025—extend its reach into MRO and specialty distribution through 1,340 distribution locations and more than 760 SRS branch networks, broadening exposure to higher-frequency professional demand in roofing, pool, landscaping, and building products. Even with industry softness from housing affordability, low turnover, and cost pressures, the business still delivered 2Q adjusted EPS of $4.92, 1.7% comparable sales growth, and 33.7% gross margin, and management’s reiterated 2026 guidance for flat to +4% EPS growth and +2.5% to +4.5% sales growth suggests the underlying franchise can keep gaining share while sustaining strong cash generation and disciplined execution.

Home Depot is facing a fundamentally mixed backdrop in which housing demand is only beginning to improve from weak levels, but its recent comp strength appears partly flattered by one-time tariff refund benefits that will not continue, creating a tougher margin setup as those offsets roll off. Even with U.S. comps of +1.3% and total comps of +1.7%, excluding the $730M of tariff refunds that benefited 2Q gross margin by 145 bps, gross margin still declined 117 bps y/y, underscoring how fragile profitability remains when cost pressures from fuel, energy, and other inputs reassert themselves. The company’s acquisition strategy and expanded pro exposure through SRS, Mingledorff’s, and GMS broaden the addressable market, but GMS’s $5.5B purchase at ~11.0x adjusted EBITDA, its $5.5B of sales versus $501M of adjusted EBITDA, and its lower 9.1% margin versus Home Depot’s 15.4% make the mix more dilutive to consolidated gross and operating margins while adding leverage and execution risk.