Home Depot: Positioned to Benefit from a Gradual Housing Recovery and Transitory Demand Headwinds, Supporting a Buy Rating

UBS analyst Michael Lasser maintained a Buy rating on Home Depot today and set a price target of $430.00.

Michael Lasser has given his Buy rating due to a combination of factors tied to Home Depot’s positioning and the evolving macro backdrop. He notes that management remains constructive yet realistic about the timeline for a broader home improvement recovery, choosing to concentrate on operational levers within its control rather than trying to time the cycle. The leadership team believes that improving housing affordability, aided by potential policy support for the housing sector, should eventually stimulate higher home sales and, in turn, stronger demand for renovation projects. They also see specific macro triggers—such as mortgage rates drifting toward the mid‑5% range and a moderate nationwide pullback in home prices—as catalysts that could re-energize spending on home improvement.

From a nearer-term standpoint, Lasser highlights that some of the headwinds depressing demand appear transitory, including prior negative news flow around layoffs and government shutdowns that temporarily dampened consumer engagement. As those headlines have faded, customer activity has picked up, and Home Depot is now cycling past the drag from last year’s elevated storm-related spending, which should make upcoming comparisons less challenging. Management is also optimistic that larger tax refunds, arriving just as the key selling season begins, will provide a timely boost to category demand. In addition, early signs of increased homeowner willingness to list—and then withdraw—properties suggest that sellers are testing the market, which Lasser interprets as a potential early indicator of a gradual thaw in housing activity that could benefit Home Depot over the medium term. These dynamics, combined with the company’s solid financial footing, underpin his conviction in maintaining a Buy rating.

In another report released on January 20, TD Cowen also maintained a Buy rating on the stock with a $450.00 price target.