Home Depot (HD) opened trading on Tuesday with a 3.3% swing lower as investors focused on the Q3 profit miss and cut in full-year earnings, which was chiefly due to the expectation for cautious consumer spending amid a soft housing market.
J.P. Morgan analyst Christopher Horvers (Overweight rating): “We see elements of realism (tough exit, consumer uncertainty, lack of acceleration in demand) as well as an effort by the company to also rebase 2026 forecasts. If the 4Q flat trend is the right trend to build from in 2026, the Street’s ~3% comp and ~8% EPS growth is likely to come down following today’s results.”
Wells Fargo analyst Zachary Fadem (Overweight) : “HD comps (of +0.2%) weaker than expected (vs. ~1% buyside), we see LOW expectations notching a touch lower into tomorrow’s update as the lack of storm activity likely drove a softer Oct/exit rate. Further, Q4 outcomes are wide, and pot’l EBIT% dilution from recent M&A (FBM closed in early Oct) likely takes FY26 Street numbers lower. Bigger picture, the NTM P/E gap vs. HD of -5x (vs. -4x LT avg) screens attractive, but unfortunately, the macro needs to cooperate.”
Evercore ISI analyst Greg Melich (Outperform): “The real story remains 2026 and any hopes for a turnaround in the long-suffering home improvement market, where real spending per house remains below LT averages yet still slightly above prior troughs. Tax cut stimulus, EHS, and the direction of rates remain key factors to watch on the macro front.”
Jefferies analyst Jonathan Matuszewski (Buy): “Comp average ticket was +1.8% y/y, vs. 2Q’s +1.4% y/y, reflecting what we believe were selective price increases across the assortment. Comp transactions were (1.6%), which is a departure in trend from the half-point decline posted over the prior four quarters. In the release, management noted a lack of storms creating greater than anticipated pressure on certain categories this quarter.”
On Seeking Alpha, analyst YR Research highlighted that Home Depot (HD) missed estimates once again, as a highly anticipated market recovery continues to be pushed out. “Perhaps the guidance cut will finally be the driver that realigns market expectations with a pressured consumer reality, as Home Depot now expects comparable sales to grow less than 1%,” advised YR Research.