Here’s what Wall Street is saying about Home Depot, Lowe’s ahead of earnings

Home improvement retailers Home Depot (HD) and Lowe’s (LOW) are scheduled to report results of their third quarters before the market open on Tuesday, November 18, and Wednesday, November 19, respectively. Home Depot’s conference call is scheduled for 9:00 am EDT on Tuesday and Lowe’s will hold its quarterly call on Wednesday at 9:00 am EDT. What to watch for:

HOUSING MARKET COMMENTARY: Builder confidence in the market for newly built single-family homes was 37 in October, up five points from September and the highest reading since April, according to the National Association of Home Builders/Wells Fargo Housing Market Index. “While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” said NAHB Chairman Buddy Hughes. “The housing market has some areas with firm demand, including smaller builders shifting to remodeling and ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”

OUTLOOK: In August, Home Depot backed its fiscal 2025 adjusted EPS view of down 2% from $15.24, with revenue up 2% and comparable sales up 1%. Analysts currently expect FY25 EPS of $15.00 on revenue of $164.66B. JPMorgan added Home Depot to the firm’s Analyst Focus List as a growth idea. The firm sees positive estimate revisions driving further multiple expansion of the shares. Wolfe Research said Home Depot’s sales improved in the summer and the business is positioned for turn in demand ahead of interest rate cuts.

Lowe’s, meanwhile, raised its guidance, and now sees FY25 EPS of $12.20-$12.45, up from $12.15-$12.40, and revenue of $84.5B-$85.5B, up from $83.5B-$84.5B. Comparable sales are expected to be flat to up 1%. Analysts currently expect FY25 EPS of $12.27 on revenue of $85.66B. Lowe’s announced on October 9 that it completed the previously announced acquisition of Foundation Building Materials. Wolfe Research said that the company’s productivity gap vs. Home Depot persists, and its Pro segment investments should drive share gains, even though there is still work to do on Lowe’s core business. 

Based on Truist Card Data, sales trends at Home Depot and Lowe’s were solid in the first half of Q3, but then slowed in mid-September and October as comparisons became more difficult, the firm said. 

TARIFFS: President Donald Trump signed a Proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imports of timber, lumber, and their derivative products. The Proclamation imposes a 10% global tariff on imports of softwood lumber. The Proclamation imposes a 25% global tariff on certain upholstered furniture, which will increase to 30% on January 1. The Proclamation imposes a 25% global tariff on kitchen cabinets and vanities, which will increase to 50% on January 1. Trading partners who negotiate with the U.S. to address the threat of wood imports to the national security of the United States may be able to secure an alternative to the pending tariff increases. The Section 232 tariff on subject wood imports from the United Kingdom will not exceed 10%. The combined Section 232 tariff and most-favored nation tariff on subject wood imports from the European Union and Japan will not exceed 15%. Products that are not subject to these Section 232 tariffs will generally be subject instead to reciprocal tariffs. 

In a post on Truth Social, President Trump said, “We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025. Additionally, we will be charging a 30% Tariff on Upholstered Furniture. The reason for this is the large scale “FLOODING” of these products into the United States by other outside Countries. It is a very unfair practice, but we must protect, for National Security and other reasons, our Manufacturing process. Thank you for your attention to this matter!”

‘CAUTIOUS BIAS’: Stifel downgraded Home Depot to Hold from Buy with a price target of $370, down from $440, on November 13. The firm has a “cautious bias” heading into the company’s Q3 report. The home improvement category is “at best stagnant and potentially deteriorating” ahead of difficult comparisons in November and December, the analyst tells investors in a research note. As such, Stifel believes Home Depot’s near-term setup is too challenging to maintain a positive stance on the shares. Its estimates, after being reduced to reflect a weaker second half of 2025 and a delayed home improvement category recovery, are now “meaningfully” below consensus.

Bernstein said that going into home improvement earnings, investor expectations are again muted for Home Depot and Lowe’s. Macro questions will be asked, but both companies’ Complex Pro strategies will also be top of mind. Bernstein expects positive comparable sales for Lowe’s and Home Depot in Q3. There was good weather in the summer, but the lack of a strong hurricane season should be a 55bps and 100bps headwind to comps for Home Depot and Lowe’s respectively, although it will be slight margin boost, the firm adds.

SENTIMENT: Check out recent Media Buzz Sentiment for Home Depot and Lowe’s as measured by TipRanks.