The Home Depot Inc. (HD) Rises 0.29% After Earnings, Misses EPS and Beats Revenue
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Post Earning Analysis
The Home Depot Inc. (HD) Rises 0.29% After Earnings, Misses EPS and Beats Revenue
The Home Depot, Inc., founded in 1978 and headquartered in Atlanta, GA, is a leading retailer in building materials, home improvement products, and related services. Operating across the U.S., Canada, and Mexico, the company offers a wide range of products including lawn and garden items, decor products, and also provides installation services, tool rentals, and equipment leasing.
The current price of the asset is $335.67, reflecting a modest increase of 0.29% today. This price is significantly below the 52-week and year-to-date (YTD) highs of $429.19 and $426.75, respectively, indicating a downward trend of over 21%. The price is slightly above the 52-week and YTD lows ($322.47), showing a minimal recovery of about 4%.
The asset is underperforming relative to its moving averages, as evidenced by negative percentage differences of -9.05%, -13.26%, and -10.6% from the 20-day, 50-day, and 200-day moving averages, respectively. This suggests a bearish trend over both short and long terms.
The technical indicators reinforce this bearish outlook. An RSI of 19.24 indicates extreme oversold conditions, which could signal a potential for reversal or stabilization, but caution is warranted. The MACD of -12.42 further supports the ongoing negative momentum. Given the proximity to recent lows and significant underperformance relative to historical highs, the asset may face further challenges unless a clear reversal pattern emerges.
The Home Depot reported its financial results for the third quarter of 2025, revealing a modest growth in total sales, which increased by 2.8% year-over-year to $41.4 billion. Despite this growth, net earnings slightly declined by 1.3% to $3.6 billion, with earnings per share (EPS) decreasing from $3.67 to $3.62. Adjusted EPS also saw a decrease, falling 1.1% to $3.74. The company’s gross profit rose by 2.9% to $13.8 billion, yet operating income fell by 1.2% to $5.4 billion, reflecting a contraction in operating margin from 13.5% to 12.9%.
Notably, the acquisition of GMS Inc. contributed approximately $900 million to the quarter’s sales. Comparable sales saw a marginal increase of 0.2%, with U.S. comparable sales up by 0.1%. Home Depot expects total sales growth of around 3.0% for fiscal 2025, with comparable sales expected to be slightly positive. However, the company anticipates a decline in diluted EPS by approximately 6.0% and adjusted EPS by about 5.0% for the fiscal year.
The company did not repurchase any shares this quarter, contrasting with the $649 million spent on buybacks in Q3 2024. Capital expenditures were maintained at about 2.5% of total sales. Home Depot continues to operate 2,356 retail stores and maintains a workforce exceeding 470,000 associates.
Earnings Trend Table
| Date | Estimate EPS | Reported EPS | Surprise % | |
|---|---|---|---|---|
| 0 | 2025-11-18 | 3.84 | 3.74 | -2.60 |
| 1 | 2025-05-20 | 3.60 | 3.56 | -1.00 |
| 2 | 2025-02-25 | 3.01 | 3.02 | 0.38 |
| 3 | 2024-11-12 | 3.64 | 3.67 | 0.81 |
| 4 | 2024-08-13 | 4.49 | 4.60 | 2.36 |
| 5 | 2024-05-14 | 3.60 | 3.63 | 0.85 |
| 6 | 2024-02-20 | 2.77 | 2.82 | 1.95 |
| 7 | 2023-11-14 | 3.76 | 3.81 | 1.28 |
Analyzing the EPS trends from the data provided, we can observe several key patterns in both the estimates and actual reported EPS figures over the quarters. Initially, there’s a noticeable consistency in surpassing the EPS estimates, as evidenced from the quarter ending in November 2023 through to the quarter ending in August 2024, where the reported EPS consistently exceeded estimates, with the surprise percentage ranging from 0.81% to 2.36%.
However, a shift occurs in the subsequent quarters beginning in November 2024, where the reported EPS starts to fall short of the estimates. This trend of underperformance relative to expectations continues into 2025, with the surprise percentages turning negative, indicating that the actual EPS was less than the estimated EPS by -1.00% to -2.60%.
This transition from consistently exceeding EPS expectations to underperforming suggests a potential shift in operational performance, market conditions, or company-specific factors that may be impacting profitability more negatively in the later quarters. Such a trend warrants close monitoring to understand the underlying causes and to anticipate future financial health and performance of the company.
Dividend Payments Table
| Date | Dividend |
|---|---|
| 2025-09-04 | 2.3 |
| 2025-06-05 | 2.3 |
| 2025-03-13 | 2.3 |
| 2024-11-27 | 2.25 |
| 2024-08-29 | 2.25 |
| 2024-05-30 | 2.25 |
| 2024-03-06 | 2.25 |
| 2023-11-29 | 2.09 |
The dividend data spanning from November 2023 to September 2025 demonstrates a clear trend of increasing dividend payouts. Initially, dividends were declared at $2.09 in November 2023. This figure saw a steady increase, with dividends being adjusted to $2.25 by March 2024. This increment represents a significant commitment to returning value to shareholders, maintaining a consistent payout through August 2024.
By November 2024, the dividends further increased to $2.25, maintaining this rate across three subsequent quarters, reflecting a stable financial strategy and possibly an optimistic outlook on the company’s earnings stability and growth prospects. By 2025, dividends experienced another uptick, reaching $2.3 from March onwards. This incremental rise, although modest, signals a positive trajectory and a continued emphasis on shareholder value.
This progressive increase in dividends over the observed period likely indicates not only improved financial health and cash flow but also a confidence in maintaining a sustainable payout ratio, which is crucial for investor confidence and stock stability.
The four most recent rating changes for the company in question reflect a mix of market optimism and cautious recalibration of expectations by notable financial firms.
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Telsey Advisory Group – November 19, 2025: Telsey Advisory Group reiterated its “Outperform” rating but adjusted the target price from $455 to $430. This adjustment suggests a slight tempering of expectations while maintaining a positive outlook on the company’s performance. The reduced target price could reflect revised earnings projections or market conditions that might impact the company’s growth trajectory.
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Stifel – November 14, 2025: Stifel issued a downgrade from “Buy” to “Hold.” This change indicates a shift in perspective, possibly due to emerging challenges the company faces or a re-evaluation of its growth potential against market dynamics. Notably, Stifel did not provide a new target price, which might suggest uncertainty or a wait-and-see approach regarding future performance metrics.
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Wolfe Research – September 18, 2025: Wolfe Research resumed coverage with an “Outperform” rating, setting a target price of $497. This optimistic assessment and high target price indicate strong confidence in the company’s market position and future growth prospects. This rating could be based on strategic initiatives taken by the company or favorable industry trends anticipated to benefit the firm.
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Stifel – May 21, 2025: Earlier in the year, Stifel upgraded the company from “Hold” to “Buy” with a target price of $425. This upgrade reflects a positive reassessment of the company’s potential, likely driven by favorable financial performances or strategic moves that align well with market opportunities.
Overall, these ratings illustrate a generally positive outlook interspersed with cautious realism about the company’s future performance, reflecting both opportunities and challenges in the evolving market landscape.
The current price of the stock is $335.67. A review of recent analyst ratings and target prices shows a general optimism about the stock’s potential for price appreciation. Telsey Advisory Group recently reiterated an “Outperform” rating and adjusted their target price from $455 to $430. Wolfe Research, upon resuming coverage, rated the stock as “Outperform” with a target price of $497. Earlier in the year, Stifel upgraded the stock from “Hold” to “Buy” and set a target price of $425. However, more recently, Stifel downgraded the stock back to “Hold,” although no new target price was specified during this downgrade.
This collection of analyst opinions suggests a consensus average target price significantly higher than the current market price, indicating a bullish outlook for the stock. The adjustments in target prices and ratings reflect ongoing assessments of the stock’s future performance potential, market conditions, and company-specific factors.
Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice, investment recommendations, or trading guidance. Markets involve risk, and past performance is not indicative of future results. You should always conduct your own research and consult with a qualified financial advisor before making any investment decisions. By acting, you accept full responsibility for your choices.