Home Depot (HD) is charting a different course on tariffs. While competitors like Walmart (WMT) plan to raise prices on tariff-impacted goods, Home Depot aims to maintain steady prices, thanks to its flexible product lines and diversified supply chain. Although the company remains exposed to broader macroeconomic pressures, such as a slowdown in housing development, I believe it’s well-positioned for a strong rebound as conditions stabilize. As outlined in the following sections, this underpins my long-term bullish outlook on the stock.
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HD’s Competitive Edge Over Import-Heavy Rivals
Currently, U.S. tariffs on Chinese imports stand at 30%, down from the previous 145% following a temporary 90-day agreement between the U.S. and China, set to expire in early July. Unlike many of its peers, particularly Walmart, Home Depot is less reliant on imports, with over 50% of its products sourced domestically. The company has been actively reducing its dependency on any single country since the early days of the Trump administration.
This strategic positioning could allow Home Depot to gain market share, especially if tariff-driven price disparities widen. While some interpret Home Depot’s decision to hold prices as a form of virtue signaling or political calculation, possibly aimed at avoiding friction with former President Trump, such speculation remains unconfirmed. What is clear, however, is that Home Depot’s lower tariff exposure provides it with a competitive advantage in the current trade environment.
Housing Market Slowdown Creates Near-Term Headwinds
Home Depot remains particularly exposed to pressures in the housing market, as a significant portion of its business comes from professionals such as contractors, builders, and plumbers. On its most recent earnings call, the company acknowledged that elevated interest rates are prompting many homeowners to delay major renovation projects. The broader housing landscape isn’t offering much relief either—30-year mortgage rates remain above 7%, and home sales have slowed to their weakest pace since 2009.

These high rates are creating a “lock-in effect,” where homeowners are reluctant to trade up and give up lower mortgage rates, ultimately reducing housing turnover and shifting demand toward smaller, DIY-style projects.
Despite these headwinds, Home Depot is well-positioned for a rebound when housing activity improves, which many experts expect to occur by 2026. The company’s scale provides it with strong bargaining power to help contain vendor-driven price increases. Additionally, Home Depot is reinforcing its focus on the professional segment, highlighted by its $18.25 billion acquisition of SRS Distribution last year, a strategic move to deepen its footprint in the pro market.
HD Maintains 2025 Guidance as Competitors Cut Forecasts
Despite ongoing headwinds, Home Depot reaffirmed its 2025 earnings outlook, projecting 2.8% sales growth, a steady gross margin of 33.4%, and an operating margin of 13%. This underscores the resilience of its business model at a time when many retailers are trimming their forecasts—Target, for instance, lowered its fiscal 2025 guidance just last week.
Is Home Depot Stock a Good Buy Right Now?
On Wall Street, HD has a Strong Buy consensus rating based on 20 Buy, six Hold, and zero Sell ratings in the past three months. HD’s average price target of $428.74 implies an upside potential of 16% over the next twelve months.

Earlier this month, analyst Steven Zaccone of Citi gave HD a Buy rating with a $433 price target. He highlighted Home Depot’s “ability to maintain stable pricing indicates its significant scale and operational efficiency, which are crucial in a competitive retail environment.” Moreover, he believes the company’s recent strategic focus on large professional clients will pay off in the long term.
KeyBanc analyst Bradley Thomas is more cautious on HD. He has a Hold rating on the stock. The analyst noted “softer trends for home improvement professionals” and believes that “elevated long-term rates and a high valuation may limit near-term upside for shares.”
Home Depot’s valuation is admittedly high. Its Price to Earnings (P/E) ratio of 24.6 trades at a 50%-plus premium to the sector median. This suggests that Home Depot will have to not only reach, but beat expectations to keep its premium valuation.
Long-Term Value Play Requires Patient Capital
Home Depot’s decision to hold prices steady while competitors raise theirs highlights a key strategic advantage—one rooted in strong supply chain diversification and smart market positioning. This approach could ultimately serve as a textbook example of how to navigate retail challenges during economic downturns. Additionally, Home Depot’s recent investments in its pro services segment are likely to pay off once the housing market begins to recover.
That said, the current economic uncertainty may linger longer than hoped, meaning it could take time before these strengths are fully reflected in the company’s financial performance. For that reason, Home Depot is best viewed through a long-term lens. Despite its premium valuation, I believe HD remains a strong hold until macro conditions improve.
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