Home Depot (HD) is set to post third quarter results on Tuesday, before markets open.
Wall Street expects the home improvement giant, often seen as a bellwether for consumer spending and the housing sector, to post EPS of $3.83 on revenue of $41.12 billion, implying a rise of 2.3% during the quarter.
Home Depot, in August, kept its annual forecasts intact despite missing comparable sales expectations, with its CFO Richard McPhail saying that consumers are increasingly taking on small projects, while larger projects remain on hold as rates remain elevated and economic uncertainty persists.
Over the last one year, Atlanta-based Home Depot has beaten EPS estimates 50% of the time and has beaten revenue estimates 75% of the time.
With the home improvement sector enters a seasonal slowdown, some analysts became cautious. Recently, Stifel downgraded Home Depot to reflect a weaker second half to 2025 and delayed recovery in the home improvement space.
“We continue to believe the drivers of the home improvement category are firmly in-tact, but believe the near-term setup is too challenging to maintain our positive approach,” Stifel’s W. Andrew Carter said.
Meanwhile, a UBS Evidence Lab survey indicated that U.S. homeowners are showing cautious but steady interest in home improvement projects, suggesting the early stages of a demand recovery that could benefit industry leaders Home Depot and Lowe’s.
“We believe Home Depot remains one of the best long-term stories in retail given company-specific growth initiatives, its outstanding culture, and commitment to innovation in stores,” J.P. Morgan analyst Christopher Horvers said.
Seeking Alpha analysts and Seeking Alpha’s Quant ratings rated the stock a Hold. In contrast, Wall Street considers it a Buy.
Over the last three months, EPS estimates have seen 16 upward revisions, compared to 12 downward revisions, while revenue estimates have seen 10 upward revisions versus 12 downward moves.
Home Depot has lost over 7% so far this year, underperforming the 14% rise in the broader S&P 500 Index.