Home Depot (HD) Stock Forecast & Price Target

Home Depot is benefiting from an improving though still-subdued demand backdrop, with U.S. comps accelerating to +1.3% in 2Q26 and monthly U.S. comps reaching +2.2% in July, while bigger-ticket transactions over $1,000 rose +2.4%. Its positive outlook is reinforced by pro-channel share gains from SRS, HD Supply, and the planned GMS integration, which expand its reach in a highly fragmented ~$1.1T Pro market and support sales growth even if housing remains soft. Financially, 2Q26 adjusted EPS of $4.92 beat expectations, gross margin expanded to 33.7% despite cost pressure, and management reiterated FY26 EPS growth of flat to +4% and sales growth of ~2.5-4.5%.

Home Depot is facing a weaker fundamental setup as elevated interest rates, rising mortgage rates, and housing affordability pressures continue to suppress turnover and curb demand for large discretionary remodeling projects. Cost headwinds are also building, with management citing about 60 bps of gross margin pressure from fuel, energy, and product input costs, while $685M of tariff refunds may only temporarily offset those pressures and could fade as a benefit into 2027. Although the company has 2,364 stores and is expanding into professional categories through SRS and GMS, weaker consumer intent, competitive ecommerce pressure, and tariff risk still point to sluggish sales growth and margin deleverage.