Home Depot Inc. (HD) delivered a strong performance in its third-quarter earnings report released on Tuesday, surpassing revenue and earnings per share expectations. The home improvement giant attributed its success to a surge in demand fueled by recent bouts of extreme weather. Despite the positive results, analysts are also focusing on the long-term outlook, with many remaining bullish on the Atlanta, Georgia-based company.
Several analysts weighed in on Home Depot’s performance, highlighting key takeaways and reiterating their positive stances. Goldman Sachs analyst Kate McShane maintained a Buy rating and boosted the price target from $384 to $410. McShane acknowledged the impact of Hurricanes Milton and Helene on same-store sales growth but noted that fourth-quarter guidance suggests a slight deceleration. Nonetheless, she remains optimistic about Home Depot’s future prospects, citing potential tailwinds from cyclical trends in the housing market. She expects the company to benefit from rising home equity as interest rates decline in 2025 and from continued efficiency gains and cost cuts, ultimately driving operating income margin expansion.
J.P. Morgan analyst Christopher Horvers echoed McShane’s sentiment, also expressing confidence in Home Depot’s quarterly performance, even excluding hurricane-related tailwinds. He believes the company will benefit from favorable macroeconomic trends, particularly as share of wallet headwinds subside and comp trends revert towards wage growth of 3.5%-4% in 2025. Horvers is particularly focused on the “do-it-yourself” segment in the cyclical housing and improvement market going into 2025.
BofA Securities analyst Robert F. Ohmes shares a positive outlook on Home Depot’s future, emphasizing opportunities for growth and market share gains in the professional market. He highlighted the strong performance of professional sales in the third quarter, especially among those engaging with Home Depot’s Pro Ecosystem, which is now available in 17 U.S. markets. Ohmes raised his 2025 earnings-per-share projections following the release of the earnings report.
Home Depot’s stock has reacted positively to the earnings news, rising over 1.86% to $419.53 in early Wednesday trading, demonstrating the market’s confidence in the company’s continued success. This performance underscores the enduring demand for home improvement and the strength of the home improvement retail sector.
