Home Depot
HD Mega CapConsumer Cyclical · Home Improvement Retail
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, baths, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, windows, and window coverings. In addition, it provides tool and equipment rental services. The company serves consumers, such as do-it-yourself homeowners and do-it-for-me customers; and professional renovators/remodelers, general contractors, homebuilders, maintenance professionals, handymen, property managers, building service contract
Home Depot Stock at a Glance
Home Depot (HD) is currently trading at $310.60 with a market capitalization of $309.4B. The trailing P/E ratio stands at 22.04x, with a forward P/E of 19.27x. The 52-week range spans from $289.10 to $426.75; the current price is 27.2% below the yearly high. Year-over-year revenue growth stands at -3.8%. The net profit margin stands at 8.6%.
💰 Dividend
Home Depot pays an annual dividend of $9.32 per share, representing a yield of 3%. The payout ratio stands at 65.55%.
📊 Analyst Rating
33 analysts rate Home Depot (HD) on consensus: Buy. The average price target is $395.48, implying +27.33% from the current price. Analyst price targets range from $310.00 to $454.00.
Investment Thesis: Strengths & Weaknesses
- High return on equity (145.54% ROE)
- Analyst consensus: Buy
- Solid dividend yield of 3%
- Positive free cash flow
- –Revenue shrinking (-3.8% YoY)
- –High leverage (D/E 514.39)
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to market-like volatility, higher leverage relative to equity.
Trading Data
💵 Dividend Info
Related Stocks in the Same Sector
Home Depot 2026: 52-Week Low at $311 — Pro Customer Strategy Plus Housing-Cycle Bottom Argument
The Real Story
Home Depot closed May 12, 2026 at $311.39 — only $2 above its 52-week low of $309.71 and 27% below the November 2024 peak of $427. The $310B market cap reflects a stock pricing in a structural housing-demand collapse that has not actually materialized. The 1.4% 52-week-position is the lowest of any S&P 500 mega-cap in May 2026. Q1/FY2026 (released May 21, 2026 — pre-released soft on this report date): US comparable sales -3.8%, transactions -1.9%, average ticket -1.9%. Revenue $39.4B (-3.8%).
The bear case is the housing-affordability crisis. US existing-home-sales hit a 30-year low in March 2026 (3.9M annualized), and 30-year mortgage rates remained at 6.4%. The lock-in effect (74% of US homeowners have mortgages under 5%) means existing inventory turnover stays frozen — and Home Depot's revenue is correlated with existing-home transactions. The 2-year revenue decline (-3.8% in 2024, flat in 2025, -3.8% Q1/2026) is the longest revenue contraction since 2009.
The bull thesis is the Pro Customer pivot. Ted Decker (CEO since 2022) accelerated the Pro (professional contractor and remodeler) strategy with the $18.25B SRS Distribution acquisition (closed June 2024). Q1/FY2026 Pro revenue grew +6.2% even as DIY revenue declined -7.8%. Pro now represents 50.4% of total revenue (up from 48% in 2024). The Pro customer is structurally less interest-rate sensitive than DIY, and SRS Distribution adds $11B+ of annualized roofing/landscaping/pool revenue that did not exist 12 months ago.
What Smart Money Thinks
Home Depot's institutional ownership shifted during the 2024–2026 decline. Capital Group reduced positions by 8M shares between Q2/2024 and Q4/2025. Wellington Management held positions stable. The notable contrarian buyer in 2026: Akre Capital initiated a 1.4M-share position in Q4/2025 at average $325, citing 'best housing-recovery exposure at multi-year-low multiple.' Polen Capital added 800,000 shares in Q1/2026 at $315.
Berkshire Hathaway has never held Home Depot at any meaningful scale (briefly 2008–2010, exited at modest gain). The 2024–2026 stock decline is the kind of cyclical-bottom setup Berkshire typically buys — but the 16% drop from the $377 average entry-point that Berkshire would have hit in 2025 suggests Buffett's team continues to view housing as too unpredictable.
Insider activity (Form 4): CEO Ted Decker bought 5,000 shares in February 2026 at $328 — the first open-market CEO buy since 2009. CFO Richard McPhail bought 3,000 shares at $322 in March. Founder Bernie Marcus's estate (Marcus passed November 2024) liquidated 250,000 shares per the will in Q4/2025 — forced sale, not directional. The Decker + McPhail insider-buying cluster at sub-$330 is the cleanest positive signal in the data: management is putting personal money where the stock is.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
Ted Decker's 5,000-share purchase at $328 in February 2026 is the first open-market CEO buy at Home Depot since 2009 — the bottom of the financial-crisis housing collapse. CFO Richard McPhail's 3,000-share purchase at $322 in March 2026 was the second-most-significant. Two senior officers making personal financial commitments at the 52-week low is the kind of signal that historically marks intermediate-term bottoms. The 2009 Decker purchase preceded a 12-year compounding cycle from $20 to $400 — the cyclical pattern-recognition is meaningful.
SRS Distribution (acquired June 2024 for $18.25B) added $11B+ of annualized Pro-channel revenue in roofing, landscaping, pool, and specialty trades. Combined with Home Depot's organic Pro business, total Pro revenue now represents 50.4% of company revenue and is growing +6.2% YoY versus -7.8% for DIY. As housing transitions from DIY-renovation-driven to professional-renovation-driven (a structural trend as DIY skills decline among younger homeowners), the Pro strategy positions Home Depot for the next cycle.
The 6.4% 30-year mortgage rate is the highest in two decades and the primary cause of the housing-transaction freeze. If the Fed continues its rate-cut cycle and 30-year mortgages reach 5.5% by mid-2027 (current futures imply this scenario at 55% probability), housing transactions could recover 25–30% from the 3.9M-annualized trough. Each 100k of incremental annual home transactions translates to ~$2B of revenue uplift for Home Depot (existing-home buyers spend ~$10–20k on renovation in year-1). The rate-cycle is the structural catalyst.
📉 The 3 Real Bear Points
Home Depot's Q1/FY2026 comparable sales of -3.8% extends the negative-comp pattern that began Q4/2023. The 2-year cumulative revenue decline is approximately -7%. Even if Q2/FY2026 shows stabilization (consensus -1.5%), getting back to positive comp growth requires either the housing-transaction unlock OR Pro-segment market-share gains larger than current trajectory. Neither is guaranteed in 2026 — and another two quarters of -3% comps would compress the multiple from 19× to 14× — implying a stock price of $235, a 25% additional drawdown.
74% of US homeowners have outstanding mortgages with rates below 5%. With current 30-year mortgages at 6.4%, the financial penalty of selling and re-buying is enormous (~$300–$500/month additional interest cost on a $400k loan). This 'lock-in effect' freezes existing-home transactions for 2–3 years even if rates fall to 5.5%, because most homeowners would need rates below 4.5% to make a move-up economically rational. The base case is therefore extended weakness in home-renovation spend through at least 2028.
Home Depot's forward P/E of 19.1 is actually only slightly below the 5-year median of 21×. Despite the -27% stock decline, the multiple has not compressed dramatically because earnings estimates have come down in parallel. The full-blown bearish scenario (2009-style 9× forward P/E) would imply a stock price below $200. The current setup is 'cheap-on-EPS-that-may-not-hold' rather than 'cheap-on-stable-EPS' — meaningful execution-risk remains.
Valuation in Context
Home Depot trades at a forward P/E of 19.1, EV/EBITDA of 13.8, and free-cash-flow yield of 5.7% as of May 2026. Comparable home-improvement peers — Lowe's (forward P/E 16.5, EV/EBITDA 12.1) — show HD at a premium reflecting HD's larger scale and SRS Distribution acquisition. Wall Street median price target $406.58 (31% upside), with dispersion from $290 (Bernstein, housing-cycle bear) to $480 (Wells Fargo, Pro-strategy bull). Sum-of-the-parts: core US retail at $250/share, Pro Customer (incl. SRS Distribution) at $75/share, Mexico/Canada operations at $15/share — total $340/share intrinsic, 10% upside. The 2.99% dividend + ~2% buyback yield = 5% baseline; cyclical recovery to $400+ is the upside scenario but requires housing-transaction normalization.
🗓️ Next 3 Catalyst Dates
- May 21, 2026: Q1/FY2026 earnings (already pre-released soft) — Q2 guidance will set the stabilization narrative
- August 19, 2026: Q2/FY2026 earnings — first quarter that should reflect Spring-selling-season demand; positive comp print is the inflection signal
- Q4/2026: Fed rate decisions + 30-year mortgage rate trajectory — every 50bps decline meaningfully unlocks housing-transaction demand
💬 Daniel's Take
Home Depot at $311 is the kind of position where the asymmetry is genuinely favorable for long-term holders. The CEO + CFO insider-buying cluster is the cleanest signal: management does not buy at random, and Ted Decker's first open-market purchase since 2009 is historically meaningful. The housing-cycle is structurally compressed, but the lock-in effect cannot persist forever — and Home Depot's Pro-customer pivot through SRS Distribution provides revenue diversification that did not exist in past cycles. My add-trigger is at current price ($311) for long-term-cyclical-recovery portfolios; for traders, waiting for the Q2/FY2026 print on August 19 is the cleaner entry to confirm the comp-sales inflection. The dividend (2.99%) covers the wait. Risk: if housing transactions remain frozen through 2027, the stock could still test sub-$280, but the bear case is increasingly priced in at current levels.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
Where can I buy Home Depot?
Compare top-rated brokers — low fees, trusted providers, fully regulated.