Home Depot (HD) AI Stock Analysis

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Home Depot

(NYSE:HD)

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Rating:62Neutral

Price Target:$370.00▲(6.11% Upside)

Action:reiterated

Date:10/03/26

The score is anchored by solid fundamentals and cash flow but meaningfully held back by high leverage and weak current technicals (price below key moving averages with negative momentum). Valuation and dividend yield are supportive, and the latest earnings call was constructive with reaffirmed guidance and continued Pro/digital strength, though margin, inventory, and macro/housing-related pressures remain key risks.

Positive Factors

Cash GenerationStrong operating and free cash flow indicates that reported earnings are substantially supported by cash generation. This provides ongoing capacity to fund stores, digital capabilities, dividends, and other investments while reinforcing the resilience of the core retail model.

Negative Factors

High LeverageThe debt-heavy capital structure reduces financial flexibility relative to the company’s operating scale. High leverage can increase sensitivity to refinancing and interest-rate conditions, while thin equity leaves less balance-sheet capacity to absorb a prolonged housing or demand downturn.

Home Depot Key Performance Indicators (KPIs)

Revenue by GeographyShows 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.

Chart Insights

The United States remains the clear revenue engine with seasonal Q2 strength and a gradually higher baseline, while International is a much smaller, choppier contributor. Management’s call reinforces that U.S. resilience is driven by Pro outperformance and digital momentum, but margin compression, higher inventories and weather-related softness pose near-term earnings risk. Strategic SRS tuck‑ins and fulfillment investments should sustain top‑line growth, yet investors should watch margins and inventory turns for signs the growth is translating into durable profitability.

Data provided by:

The Fly

Home Depot (HD) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $347.88B
Dividend Yield: 2.66%
Average Volume (3M): 4.72M
Price to Earnings (P/E): 24.3
Beta (1Y): 0.67
Revenue Growth: 2.50%
EPS Growth: -2.95%
Country: US
Employees: 472,400
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Home Improvement

Home Depot Business Overview & Revenue Model

Company Description

The Home Depot, Inc. operates as a prominent retailer specializing in home renovation and improvement. Through its expansive network of "The Home Depot" stores, it furnishes consumers with an extensive array of goods, including building materials, ho...

How the Company Makes Money

Home Depot primarily makes money by selling home improvement merchandise through its stores and online channels. Its core revenue stream is retail sales of products (e.g., building materials, tools, hardware, plumbing/electrical supplies, paint, floo...

Home Depot Earnings Call Summary

Earnings Call Date:Aug 18, 2026(Q2-2026)|% Change Since:3.96%|Next Earnings Date:Nov 17, 2026

Earnings Call SentimentPositive

The call was broadly constructive: second-quarter sales, comps, adjusted EPS, digital performance, Pro results, delivery capabilities, category breadth, and international performance exceeded expectations, while fiscal 2026 guidance was reaffirmed. However, management continued to cite pressure on large discretionary projects, historically low housing turnover, volatile demand, and significant cost headwinds that are offsetting tariff refund benefits. The highlights significantly outweighed the lowlights.

Positive Updates

Quarterly Sales and Earnings Beat Expectations

Second-quarter sales were $47.9 billion, up 5.7% year over year. Total company comparable sales increased 1.7%, U.S. comps increased 1.3%, and adjusted diluted EPS rose to $4.92 from $4.68, an increase of 5.1%. Management said results exceeded expectations.

Negative Updates

Consumer Uncertainty and Housing Affordability Pressure

Consumer uncertainty and housing affordability continued to pressure demand for larger home improvement projects. Management specifically said larger discretionary projects and discretionary financed projects remained under pressure.

Company Guidance

Home Depot reaffirmed its fiscal 2026 guidance, expecting comp sales to range between flat to 2% growth and total sales growth of between approximately 2.5% and 4.5%, with SRS delivering mid-single-digit percent organic sales growth; it plans to open approximately 15 new stores and 40-50 new SRS branches, with gross margin expected to be approximately 33.1%, operating margin approximately 12.4%-12.6%, adjusted operating margin approximately 12.8%-13%, an effective tax rate targeted at approximately 24.3%, net interest expense of approximately $2.3 billion, diluted earnings per share and adjusted diluted earnings per share to both increase approximately flat to 4% compared to fiscal 2025, and capital expenditures of approximately 2.5% of sales for fiscal 2026.

Home Depot Financial Statement Overview

Summary

Profitability and cash generation are solid (Income Statement 72; Cash Flow 74), with healthy margins and strong free cash flow. The key drag is the balance sheet (Balance Sheet 38) due to high leverage and thin equity, which reduces flexibility if the housing cycle or rates worsen.

Income Statement

72Positive

Balance Sheet

38Negative

Cash Flow

74Positive

Financial statement breakdown
Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	169.18B	164.68B	159.51B	152.67B	157.40B	151.16B
Gross Profit	56.18B	54.87B	53.31B	50.96B	52.78B	50.83B
EBITDA	25.47B	25.14B	25.43B	25.11B	27.07B	25.95B
Net Income	14.23B	14.16B	14.81B	15.14B	17.11B	16.43B
Balance Sheet
Total Assets	109.38B	105.09B	96.12B	76.53B	76.44B	71.88B
Cash, Cash Equivalents and Short-Term Investments	2.08B	1.39B	1.66B	3.76B	2.76B	2.34B
Total Debt	62.57B	65.35B	62.29B	52.24B	50.36B	46.27B
Total Liabilities	92.77B	92.28B	89.48B	75.49B	74.88B	73.57B
Stockholders Equity	16.62B	12.81B	6.64B	1.04B	1.56B	-1.70B
Cash Flow
Free Cash Flow	15.10B	12.65B	16.32B	17.95B	11.50B	14.01B
Operating Cash Flow	18.78B	16.32B	19.81B	21.17B	14.62B	16.57B
Investing Cash Flow	-10.10B	-8.98B	-21.03B	-4.73B	-3.14B	-2.97B
Financing Cash Flow	-9.44B	-7.71B	-694.00M	-15.44B	-10.99B	-19.12B

Home Depot Technical Analysis

Technical Analysis SentimentPositive

Last Price348.69

Price Trends

50DMA312.15Positive

100DMA324.66Positive

200DMA329.41Positive

Market Momentum

MACD11.90Negative

RSI63.97Neutral

STOCH59.71Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HD, the sentiment is Positive. The current price of 348.69 is above the 20-day moving average (MA) of 333.83, above the 50-day MA of 312.15, and above the 200-day MA of 329.41, indicating a bullish trend. The MACD of 11.90 indicates Negative momentum. The RSI at 63.97 is Neutral, neither overbought nor oversold. The STOCH value of 59.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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.

Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

1 New Risk

1.Failure to maintain a safe and secure store environment may adversely impact sales, costs, the customer and associate experience, or our brand and reputation.Q4, 2023

Home Depot Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

HD against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	79Outperform	$29.49B	25.66	57.79%	1.16%	2.24%	7.35%
FND	66Neutral	$5.09B	21.41	9.74%	―	1.82%	10.69%
IBP	63Neutral	$5.95B	25.90	34.75%	1.46%	0.70%	-5.38%
HD	62Neutral	$347.46B	24.35	102.68%	2.66%	2.50%	-2.95%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LOW	60Neutral	$127.62B	19.23	-71.79%	2.15%	8.16%	-2.84%
TSCO	59Neutral	$19.00B	19.60	37.64%	2.61%	3.53%	-10.44%

* Consumer Cyclical Sector Average

Performance Comparison

HD and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
HD	Home Depot	348.69	0.52	0.15%
LOW	Lowe's Companies	227.73	7.57	3.44%
TSCO	Tractor Supply Company	36.45	-15.97	-30.46%
WSM	Williams-Sonoma	254.05	75.16	42.01%
IBP	Installed Building Products	229.00	-12.53	-5.19%
FND	Floor & Decor Holdings	47.75	-9.04	-15.92%

Home Depot Corporate Events

Business Operations and StrategyExecutive/Board Changes

Home Depot Expands Executive Roles, Awards Restricted Stock

Positive

Aug 21, 2026

On July 30, 2026, Home Depot announced expanded executive leadership responsibilities, assigning EVP of Merchandising William D. Bastek oversight of the company’s product development merchant portfolio, including private brands, and EVP of Interconne...

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.

Date of analysis: Oct 03, 2026

Home Depot AI Stock Analysis