Home Depot (HD)
NYSE:HD
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Home Depot
(NYSE:HD)
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Rating:63Neutral
Price Target:
$333.00
▼(-4.69% Downside)
Action:Reiterated
Date:05/27/26
The score is supported primarily by strong cash generation and generally solid operating performance, but is held back by a highly leveraged balance sheet and weakening profitability trends. Technical signals are bearish (price below key moving averages and negative MACD), while valuation is moderate with a supportive dividend. The latest call reinforced stable-but-modest guidance, tempered by margin, inventory, and ROIC pressure.
Positive Factors
Strong Cash Generation
Home Depot's consistently positive operating and free cash flow — with FCF roughly three-quarters to mid-80% of net income and a meaningful TTM increase — provides durable internal funding for capex, dividends, and strategic investments. This cash conversion supports resilience through cycles and funds long-term initiatives without sole reliance on external financing.
Negative Factors
Elevated Leverage
A debt-heavy capital structure (debt-to-equity near ~5x) reduces financial flexibility and raises exposure to rising interest costs. High leverage constrains the company's ability to pursue opportunistic M&A or aggressive buybacks without increasing risk, and it amplifies downside in an earnings or margin shock, making capital management a persistent strategic constraint.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Home Depot's consistently positive operating and free cash flow — with FCF roughly three-quarters to mid-80% of net income and a meaningful TTM increase — provides durable internal funding for capex, dividends, and strategic investments. This cash conversion supports resilience through cycles and funds long-term initiatives without sole reliance on external financing.
Read all positive factors
Home Depot Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows how sales split across regions (U.S., Canada, Mexico), revealing where Home Depot is most dependent on consumer and professional spending. Geographic concentration highlights exposure to local housing markets, weather-driven demand, currency moves, and regional growth opportunities.
Shows how sales split across regions (U.S., Canada, Mexico), revealing where Home Depot is most dependent on consumer and professional spending. Geographic concentration highlights exposure to local housing markets, weather-driven demand, currency moves, and regional growth opportunities.
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The Fly
The FlyHome Depot (HD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$310.62B
Dividend Yield2.67%
Average Volume (3M)4.95M
Price to Earnings (P/E)22.1
Beta (1Y)0.79
Revenue Growth2.23%
EPS Growth-4.48%
CountryUS
Employees470,100
SectorConsumer Cyclical
Sector Strength84
IndustryHome Improvement
Share Statistics
EPS (TTM)14.12
Shares Outstanding997,116,700
10 Day Avg. Volume5,965,182
30 Day Avg. Volume4,947,002
Financial Highlights & Ratios
PEG Ratio-5.75
Price to Book (P/B)29.30
Price to Sales (P/S)2.28
P/FCF Ratio29.69
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue2.23
Enterprise Value/Gross Profit6.75
Enterprise Value/Ebitda16.10
Forecast
1Y Price Target
$378.25Price Target Upside8.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering24
EPS Forecast (FY)14.95
Revenue Forecast (FY)$171.04B
Home Depot Business Overview & Revenue Model
Company Description
The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repai...
How the Company Makes Money
Home Depot primarily makes money by selling home improvement products and related services, with revenue recognized largely at the point of sale through its retail stores and digital channels. Its key revenue stream is merchandise sales across maj...
Home Depot Earnings Call Summary
Earnings Call Date:May 19, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Neutral
The call presented a balanced view: solid top-line growth (sales +4.8%), strong digital momentum (online comps >10%), Pro outperformance, and strategic expansion through acquisitions (Mingledorff's) and fulfillment improvements. Those positives were offset by profit pressure — lower gross and operating margins, EPS decline (adjusted EPS down ~3.7%), higher inventories, and a drop in ROIC. Management reaffirmed FY26 guidance and emphasized execution and market-share opportunities, but flagged macro and cost uncertainties (weather variability, fuel, tariffs, rates).Positive Updates
Total Sales Growth
First-quarter sales totaled $41.8 billion, up 4.8% year-over-year (+$1.9 billion).
Negative Updates
Earnings per Share Decline
GAAP diluted EPS was $3.30 vs $3.45 prior year; adjusted diluted EPS (ex intangibles) was $3.43, down ~3.7% year-over-year ($3.43 vs $3.56).
Read all updates
Q1-2026 Updates
Positive
Negative
Total Sales Growth
First-quarter sales totaled $41.8 billion, up 4.8% year-over-year (+$1.9 billion).
Read all positive updates
Company Guidance
Home Depot reaffirmed fiscal 2026 guidance: comp sales flat to +2% and total sales growth of about 2.5%–4.5% (reflecting GMS, new stores/branches and tuck‑ins); SRS mid‑single‑digit organic sales growth; gross margin ~33.1%; operating margin ~12.4%–12.6% (adjusted operating margin ~12.8%–13.0%); effective tax rate ~24.3%; net interest expense ~$2.3 billion; diluted EPS and adjusted diluted EPS both expected to be roughly flat to +4% versus fiscal 2025; capital expenditures ~2.5% of sales; and plans to open ~15 new Home Depot stores and 40–50 new SRS locations.Home Depot Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
52
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 166.59B | 164.68B | 159.51B | 152.67B | 157.40B | 151.16B |
| Gross Profit | 55.19B | 54.87B | 53.31B | 50.96B | 52.78B | 50.83B |
| EBITDA | 23.12B | 24.29B | 25.43B | 25.11B | 27.07B | 25.95B |
| Net Income | 14.01B | 14.16B | 14.81B | 15.14B | 17.11B | 16.43B |
Balance Sheet | ||||||
| Total Assets | 107.90B | 105.09B | 96.12B | 76.53B | 76.44B | 71.88B |
| Cash, Cash Equivalents and Short-Term Investments | 1.60B | 1.39B | 1.66B | 3.76B | 2.76B | 2.34B |
| Total Debt | 57.98B | 65.35B | 62.29B | 52.24B | 50.36B | 46.27B |
| Total Liabilities | 94.03B | 92.28B | 89.48B | 75.49B | 74.88B | 73.57B |
| Stockholders Equity | 13.87B | 12.81B | 6.64B | 1.04B | 1.56B | -1.70B |
Cash Flow | ||||||
| Free Cash Flow | 14.31B | 12.65B | 16.32B | 17.95B | 11.50B | 14.01B |
| Operating Cash Flow | 18.03B | 16.32B | 19.81B | 21.17B | 14.62B | 16.57B |
| Investing Cash Flow | -9.16B | -8.98B | -21.03B | -4.73B | -3.14B | -2.97B |
| Financing Cash Flow | -8.67B | -7.71B | -694.00M | -15.44B | -10.99B | -19.12B |
Home Depot Technical Analysis
Negative
349.40
Price Trends
324.18
Negative
346.45
Negative
360.75
Negative
Market Momentum
-3.51
Negative
45.09
Neutral
69.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HD, the sentiment is Negative. The current price of 349.4 is above the 20-day moving average (MA) of 311.67, above the 50-day MA of 324.18, and below the 200-day MA of 360.75, indicating a bearish trend. The MACD of -3.51 indicates Negative momentum. The RSI at 45.09 is Neutral, neither overbought nor oversold. The STOCH value of 69.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HD.
Home Depot Risk Analysis
Home Depot disclosed 25 risk factors in its most recent earnings report. Home Depot reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Home Depot Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $423.36B | 47.93 | 28.27% | 0.59% | 9.23% | 12.69% | |
63 Neutral | $310.62B | 22.10 | 113.30% | 2.67% | 2.23% | -4.48% | |
62 Neutral | $15.74B | 14.61 | 42.57% | 1.80% | 4.64% | 1.15% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $15.33B | 13.40 | 38.34% | 5.46% | 0.99% | 31.91% | |
56 Neutral | $115.86B | 17.39 | -64.84% | 1.94% | 6.24% | -2.12% | |
53 Neutral | $5.47B | 27.31 | 8.38% | ― | 3.46% | -3.01% |
* Consumer Cyclical Sector Average
HD
Home Depot
311.52
-52.36
-14.39%
BBY
Best Buy Co
72.78
6.67
10.09%
COST
Costco
954.27
-95.41
-9.09%
LOW
Lowe's
206.64
-17.75
-7.91%
TSCO
Tractor Supply
30.01
-18.04
-37.54%
FND
Floor & Decor Holdings
50.56
-22.52
-30.82%
Home Depot Corporate Events
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
Home Depot Shareholders Approve Governance Charter Amendments
Positive
May 26, 2026
At its May 21, 2026 annual meeting, Home Depot shareholders approved amendments to the company’s certificate of incorporation that extend limited exculpation from monetary liability to certain officers, aligning them more closely with protec...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.