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Investing.com - DA Davidson has raised its price target on Home Depot (NYSE:HD) to $475.00 from $450.00 while maintaining a Buy rating on the stock. The retail giant, with a market capitalization of over $404 billion and annual revenue exceeding $162 billion, continues to demonstrate strong market presence. According to InvestingPro data, Home Depot maintains robust profitability with a gross margin of 33.3%.
The firm cited improving demand trends for the home improvement retailer, even with mortgage rates remaining in the high 6% range for most of the quarter. DA Davidson noted that Home Depot appears to be benefiting from market share gains driven by company-specific initiatives. As a prominent player in the Specialty Retail industry, Home Depot has demonstrated its resilience through consistent dividend payments, having maintained them for 39 consecutive years, as highlighted by InvestingPro.
The analyst also highlighted that Home Depot’s performance may be improving as the market moves further away from the COVID-induced pull-forward effect that led to outsized comparable sales in 2020 through much of 2022. Additional factors supporting the retailer include the impact of tariffs on pricing and surges in home equity lines of credit (HELOC).
Looking ahead, DA Davidson suggested that prospects of a more dovish Federal Reserve by mid-next year could set the stage for potentially lower mortgage rates, which would serve as a further catalyst for demand in the home improvement sector.
The new $475 price target is based on 28 times DA Davidson’s forecast for Home Depot’s 2026 earnings per share.
In other recent news, Home Depot reported its Q2 2025 earnings, showing a slight miss in both earnings per share (EPS) and revenue compared to analysts’ forecasts. The company posted an EPS of $4.68, just below the expected $4.72, and revenue of $45.3 billion, slightly under the forecasted $45.44 billion. Despite these minor shortfalls, the company experienced strong operational updates and strategic initiatives. Truist Securities raised its price target for Home Depot to $454.00 from $433.00, maintaining a Buy rating due to the company’s improving sales trends. This marks Home Depot’s third consecutive quarter of positive comparable sales in the United States, with accelerating trends as weather normalized. Mizuho (NYSE:MFG) also increased its price target to $450.00 from $435.00, citing demand improvement across the company’s core business. They noted that 12 of 16 product categories showed positive performance, with only four categories remaining negative. These developments indicate a positive outlook from analysts for Home Depot’s future performance.
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