The U.S. home improvement retail giant Home Depot reported mixed quarterly results. While its Q1 revenue and adjusted earnings surpassed market expectations, a key metric, comparable store sales, underperformed. The company also reaffirmed its fiscal 2026 guidance. Following the earnings release, Wall Street analysts maintained a positive outlook on Home Depot's prospects.
Morgan Stanley continues to rate Home Depot as "Overweight" with a $420 price target. Analyst Simeon Gutman stated the firm remains positive on Home Depot's risk-reward profile, viewing it as a high-quality discretionary investment. He noted that the current stock price does not yet reflect expectations for a U.S. housing market recovery, suggesting the market is waiting for clearer signs of improvement rather than positioning ahead of it. "Market expectations have bottomed," Gutman emphasized, "and the Q1 2026 results do not alter our view of a positive full-year EPS trajectory for the company. Therefore, any signs of recovery in the home improvement end market will provide support for the stock." He added that despite significant headwinds from the "lock-in effect" in housing and high interest rates, demand from home repair and maintenance, coupled with demand generated by the annual turnover of approximately 4 million existing homes, is sufficient to support the stock price.
Jefferies maintained its "Buy" rating on Home Depot with a $454 price target. Analyst Jonathan Matuszewski highlighted that a key takeaway from the earnings report was that underlying demand in Q1 held steady compared to the same period in 2025, despite persistent low consumer confidence and ongoing pressure from high homeownership costs.
Wells Fargo also maintained an "Overweight" rating on Home Depot, though it lowered its price target from $375 to $360. Analyst Zachary Fadem noted that against a backdrop where market focus remains on factors like interest rates and oil prices, and with macroeconomic and category-specific risks still present, Home Depot management's decision to reaffirm its fiscal 2026 guidance sends a positive signal.
According to data from TipRanks, Wall Street analysts overall remain bullish on Home Depot, with a consensus rating of "Strong Buy" and an average price target of $389.63, implying approximately 29% upside from the current stock price.
Home Depot's stock closed up 0.88% at $302.44 on Tuesday. The stock has declined nearly 12% year-to-date.
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