Home Depot (HD) Stock Forecast & Price Target

Home Depot has demonstrated considerable synergies with its acquisition of SRS, leading to a record increase in contractor spending through its Pro Desk and Marketplace, thereby expanding its market reach in the professional sector. The company's total addressable market has grown to $1.1 trillion, highlighting a significant opportunity, particularly in the complex professional segment, where Home Depot holds a relatively low market share despite its substantial scale, with current sales representing only 15% of the overall market. Furthermore, in a recovery scenario, Home Depot anticipates annual total sales growth of 5% to 6% and same-store sales growth of 4% to 5%, alongside an expected increase in operating profit and EPS growth that could surpass sales growth, cementing a positive long-term outlook for the company.

Home Depot has reaffirmed its 2025 guidance, noting an expected decline in adjusted EPS of approximately 5% to $14.48, with housing turnover significantly reduced to around 2.9% of total housing stock, which is below the long-term average of 4.1%. The company is facing operational challenges, such as a contraction in operating margins and a lowered forecast for comp sales growth, which are being negatively impacted by its wholesale distribution expansion and ongoing wage and capital investments. Furthermore, deteriorating employment trends pose additional risks to retail sales, suggesting a continuing decline in consumer spending and overall demand for Home Depot's products and services.