Home Depot (HD) Stock Forecast & Price Target

Home Depot is poised for continued sales growth, forecasting a 2.3% increase year-over-year to $41.1 billion, reflecting robust performance bolstered by recent acquisitions such as GMS, which contributed $900 million to sales. The company's inventory management, although showing a 9.6% increase, suggests a strategy to meet rising demand, likely supported by an overall consumer trend of investing in home improvement, given the sharp rise in home values by approximately 50% since 2019. Additionally, the continued expansion into the MRO sector through strategic partnerships, like the tie-up with SRS, positions Home Depot to enhance its appeal among professional contractors, thereby driving future sales growth and margin improvement.

The analysis indicates a negative outlook for Home Depot's stock, primarily due to declining margins and weaker sales expectations. Gross margins remained flat at 33.4%, marking a slight decline versus consensus, while operating margins dropped 90 basis points year-over-year to 12.9%, which was also below projections. Additionally, the company lowered its guidance for 2025, anticipating a 5% decline in adjusted EPS to $14.48, reflecting a challenging demand environment exacerbated by softer market conditions and lower expectations for same-store sales growth.