Ahead of Home Depot’s (HD) results for the third quarter of Fiscal 2025 on November 18, Stifel analyst Andrew Carter downgraded Home Depot stock from Buy to Hold and lowered the price target from $440 to $370, saying that the home improvement category is “at best stagnant and potentially deteriorating ahead of difficult November/December comparisons.”
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Stifel Analyst Moves to the Sidelines on Home Depot Stock
While Carter believes the long-term drivers of the home improvement sector are solid, he thinks the near-term outlook is too tough to maintain a positive stance. Consequently, the analyst lowered his estimates for Home Depot and Lowe’s (LOW) for the second half of Fiscal 2025 and for Fiscal 2026 and 2027. These revised estimates reflect a weaker second half of 2025 and a slower recovery for the overall home improvement market. The analyst’s projections are now well below the Street’s consensus expectations.
Additionally, Carter expects Home Depot’s third-quarter 2025 results and management’s commentary to show softer same-store sales than originally expected. This weakness may raise questions about Home Depot’s Complex Pro strategy, especially given that the company has spent more than $20 billion on mergers and acquisitions ahead of its December Investor Day.
Recently, JPMorgan lowered its price targets for Home Depot and Lowe’s. Meanwhile, Wall Street expects Home Depot to report a 4.5% year-over-year rise in Q3 FY25 adjusted earnings per share (EPS) to $3.84. Revenue is expected to grow 2.4% to $41.2 billion.
Is HD a Good Stock to Buy?
Heading into Q3 earnings, Wall Street has a Strong Buy consensus rating on Home Depot stock based on 20 Buys and six Holds. The average HD stock price target of $443 implies 20.4% upside potential. HD stock is down 5.4% year-to-date.
