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On Wednesday, RBC Capital Markets maintained a Sector Perform rating for Home Depot stock (NYSE:HD), with a steady price target of $399.00. According to InvestingPro data, Home Depot, a prominent player in the Specialty Retail industry with a market capitalization of $375 billion, is currently trading near its Fair Value. The company maintains strong financial health, earning a "GOOD" overall score from InvestingPro’s comprehensive analysis. The latest analysis from RBC comes after Home Depot reported first-quarter results that aligned with expectations and confirmed its financial guidance for the future. RBC Capital’s analyst noted an improved outlook for comparable store sales growth, yet expressed concerns about the potential for earnings to be affected by management’s pricing strategies for consumers. The company has demonstrated solid financial performance, with a robust gross profit margin of 33.3% and impressive return on assets of 16.4%. Notably, Home Depot has maintained dividend payments for 39 consecutive years, with a current dividend yield of 2.4%.
Home Depot’s first-quarter performance met market projections, and the company upheld its financial outlook for the coming periods. RBC Capital adjusted its forecast slightly in response to the earnings release and guidance. For the second quarter, the firm now expects comparable sales to increase by 1.7%, a slight uptick from the previous 1.5% estimate. Additionally, the adjusted earnings per share (EPS) prediction for the second quarter has been marginally increased to $4.71 from $4.70.
Looking further ahead, RBC Capital has also made small revisions to its projections for Home Depot’s performance in the years 2025 and 2026. The firm anticipates comparable sales growth of 1.4% for 2025 and 3.6% for 2026, which is a minor adjustment from the prior estimates of 1.3% and 3.6%, respectively. In terms of adjusted EPS, the estimates for 2025 and 2026 have been revised to $14.98 and $15.95, up from $14.95 and $15.94.
The price target of $399 remains unchanged, with RBC Capital basing this figure on approximately 25 times their revised 2026 adjusted EPS estimate of $15.95. The analyst’s commentary highlighted a balanced view of Home Depot’s prospects, acknowledging the positive aspects of the company’s sales trajectory while also considering the implications of its pricing strategy on profit margins. With analyst targets ranging from $297 to $484, investors seeking deeper insights can access comprehensive analysis and additional ProTips through InvestingPro, which offers exclusive research reports covering over 1,400 US stocks, including Home Depot’s detailed financial health metrics and growth potential.
In other recent news, Home Depot’s first-quarter performance has been a focal point for analysts and investors. Despite missing expectations with an adjusted earnings per share (EPS) of $3.56, which fell short by 3 cents, the company reaffirmed its fiscal year 2025 guidance. Bernstein analysts raised their price target to $398, maintaining a Market Perform rating, while Mizuho (NYSE:MFG) Securities adjusted their target to $435, keeping an Outperform rating. Additionally, Telsey Advisory Group maintained a $455 target with an Outperform rating, acknowledging Home Depot’s resilience despite mixed first-quarter results. DA Davidson reduced their price target to $450 but reaffirmed a Buy rating, citing stable sales trends and strategic positioning. KeyBanc Capital Markets kept a Sector Weight rating, noting challenges from unfavorable weather and high interest rates. The company reported a slight decline in comparable store sales by 0.3%, yet saw growth in its professional customer segment. Home Depot’s strategic efforts to mitigate tariff impacts and diversify sourcing are also noteworthy, with a plan to ensure no single country represents more than 10% of its imports by 2026.
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