Home Depot Matches Lowe's Comparable Sales, Boosting Investor Confidence
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: CNBC
- Comparable Sales Growth: Home Depot and Lowe's both reported a 0.6% increase in comparable sales for Q1, indicating a leveling competitive landscape that boosts investor confidence in Home Depot, despite a 15% decline in its stock over the past year.
- Stock Price Surge: Following its earnings report, Home Depot's shares jumped over 5%, reflecting market approval of its strategic shift towards the Pro market, while Lowe's shares fell by 1.5% due to underwhelming results.
- Future Outlook: Analysts predict that Home Depot will maintain parity with Lowe's in the upcoming quarters, with growth rates of 0.9% and 1.5%, respectively, and may begin to outpace Lowe's thereafter, showcasing its strong performance in the Pro market.
- Acquisition Strategy: Home Depot's completion of the over $18 billion acquisition of SRS in 2024 enhances its market share in the Pro business, expected to drive future growth, although current high mortgage rates pose challenges to the overall market.
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Analyst Views on HD
Wall Street analysts forecast HD stock price to rise
23 Analyst Rating
17 Buy
5 Hold
1 Sell
Moderate Buy
Current: 310.540
Low
320.00
Averages
401.47
High
441.00
Current: 310.540
Low
320.00
Averages
401.47
High
441.00
About HD
The Home Depot, Inc. is a home improvement retailer. It offers its customers an assortment of home improvement products, building materials, lawn and garden products, decor products, and facilities maintenance, repair, and operations (MRO) products, in stores and online. It also provides a number of services, including home improvement installation services, and tool and equipment rental. It operates over 2,359 stores located throughout the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico. Its stores average over 104,000 square feet of enclosed space, with over 24,000 additional square feet of outside garden area. It also maintains a network of distribution and fulfillment centers, as well as mobile applications and e-commerce websites in the U.S., Canada, and Mexico. It serves two primary customer groups, including both do-it-yourself (DIY) and do-it-for-me (DIFM) customers and professional customers (Pros).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Home Depot Earnings Analysis and Market Outlook
- Earnings Highlights: Home Depot's Q1 revenue increased by 4.8% year-over-year, although earnings per share declined by 4.3%, indicating a shift in consumer spending patterns amid high inflation, reflecting both resilience and challenges in the market.
- Market Reaction: Despite beating revenue expectations, Home Depot's stock fell by 1.37%, suggesting investor concerns about the overall economic environment and consumer confidence, which may impact future stock performance.
- Industry Trends: Existing home sales in the U.S. are at levels comparable to the 2008 financial crisis, indicating that high interest rates continue to suppress the housing market, leaving Home Depot in a challenging market environment that requires monitoring consumer confidence recovery.
- Investment Opportunities: Home Depot's stock is currently about 30% below its 2024 peak, with a 3.1% dividend yield, the highest since the Great Recession, attracting long-term investors to consider its potential as a value investment.
See More
Home Depot Annual Shareholder Meeting Voting Results Announced
- Voting Results: At Home Depot's recent annual shareholder meeting, shareholders approved amendments to the certificate of incorporation extending exculpation for certain officers and adopted miscellaneous charter housekeeping changes, indicating strong support for corporate governance.
- Board Re-election: Shareholders re-elected the full slate of directors for one-year terms and ratified KPMG as auditor for the fiscal year ending January 31, 2027, reflecting confidence in the current management team and stability.
- Advisory Pay Resolution: The majority support for the advisory say-on-pay resolution indicates shareholder approval of the executive compensation structure, despite multiple shareholder proposals failing by wide margins, showcasing a consensus on the company's strategic direction.
- Executive Continuity: The voting results confirm that Ted Decker will continue in his dual role as chair and CEO, having served as CEO since March 1, 2022; however, shares remain slightly lower than when he took over, suggesting cautious market sentiment regarding his leadership.
See More
Investment Choices in Home Improvement Market Analysis
- Lowe's Performance Overview: In fiscal 2025, Lowe's achieved revenue of $86 billion, reflecting a growth of approximately 3%, with a net income of about $6.7 billion and a net margin of 7.7%, indicating its stability and profitability in the home improvement market.
- Home Depot Highlights: Home Depot reported nearly $165 billion in revenue for 2025, growing around 3.2%, with a net income of approximately $14.2 billion and a net margin of 8.6%, showcasing its strong performance and profitability in the market.
- Competitive Risk Analysis: Lowe's faces intense competition from retail giants like Walmart and Amazon, with its performance heavily reliant on the health of the housing market and consumer spending, while Home Depot is sensitive to high interest rates that may slow down large renovation projects.
- Valuation Comparison: Lowe's forward P/E ratio stands at 17x, lower than Home Depot's 20.7x, and its P/S ratio is 1.4x compared to Home Depot's 1.9x, indicating a more attractive value proposition and growth potential moving forward.
See More
Lowe's vs Home Depot: Market Competition Analysis
- Market Positioning Differences: Lowe's focuses on DIY consumers with 1,748 stores and $86 billion in revenue for fiscal 2025, yielding a net income of approximately $6.7 billion and a net margin of 7.7%, while Home Depot serves a broader customer base with nearly $165 billion in revenue and a net income of about $14.2 billion, reflecting a net margin of 8.6%.
- Financial Health Comparison: As of January 2026, Lowe's debt-to-equity ratio stands at 4.2 with a current ratio of approximately 1.1 and free cash flow nearing $7.7 billion; in contrast, Home Depot's debt-to-equity ratio is 5.1 with free cash flow reaching $12.6 billion, highlighting differing financial management strategies.
- Growth Potential Assessment: Analysts project Lowe's annual earnings growth at about 9%, surpassing Home Depot's 5%, while Lowe's forward P/E ratio of 17 is lower than Home Depot's 21, indicating that Lowe's may offer higher investment return potential in the current market environment.
- Competitive Risk Analysis: Lowe's faces intense competition from Walmart and Amazon, with its performance heavily reliant on the health of the housing market, whereas Home Depot may be impacted by high interest rates affecting large renovation projects, necessitating both companies to maintain competitiveness in pricing and service to avoid market share loss.
See More
Jim Cramer Recommends Four Stocks for New Investors
- Diversification Strategy: Jim Cramer emphasized the need for diversification even as artificial intelligence dominates the market, ensuring long-term stability in investment portfolios to mitigate risks associated with single-theme investments.
- Stock Recommendations: Cramer recommended four stocks for new members to buy, including Alphabet, Amazon, Apple, and Nvidia, all of which demonstrate strong growth potential, particularly in their AI-related businesses.
- Market Outlook: Despite challenges faced by Meta and Microsoft, Cramer remains cautiously optimistic about their future performance, suggesting that these companies could achieve breakthroughs in the evolving AI landscape.
- Emerging Investment Opportunities: Stocks like Arm Holdings and Broadcom are showing strong performance, particularly in the data center and AI chip sectors, reflecting robust market demand for related technologies, making them worth watching for long-term growth potential.
See More
Market Performance Review Since Last CNBC Investing Club Meeting
- Overall Market Performance: Since the April 16 meeting, the S&P 500 has risen by 6.7% and the Nasdaq by 10.6%, indicating a strong market rebound and significantly boosting investor confidence in equities.
- Outstanding Performance by Arm: Arm's stock surged 97.9% since our position initiation, driven by robust demand expectations for CPUs, particularly in the AI sector, with projected revenues of $20 billion this year greatly enhancing its royalty business.
- Cybersecurity Stocks Rebound: CrowdStrike and Palo Alto Networks saw increases of 60.6% and 53.8%, respectively, and despite ZScaler's negative impact, the market remains optimistic about their growth prospects, with price targets raised by multiple Wall Street firms.
- Underperformance of Meta and Home Depot: Meta's stock fell 9.5% primarily due to investor concerns over its spending on generative AI, while Home Depot dropped 7.9% as high mortgage rates dampened growth expectations, reflecting a lack of confidence in their future performance.
See More
Home Depot Earnings Analysis and Market Outlook
- Earnings Highlights: Home Depot's Q1 revenue increased by 4.8% year-over-year, although earnings per share declined by 4.3%, indicating a shift in consumer spending patterns amid high inflation, reflecting both resilience and challenges in the market.
- Market Reaction: Despite beating revenue expectations, Home Depot's stock fell by 1.37%, suggesting investor concerns about the overall economic environment and consumer confidence, which may impact future stock performance.
- Industry Trends: Existing home sales in the U.S. are at levels comparable to the 2008 financial crisis, indicating that high interest rates continue to suppress the housing market, leaving Home Depot in a challenging market environment that requires monitoring consumer confidence recovery.
- Investment Opportunities: Home Depot's stock is currently about 30% below its 2024 peak, with a 3.1% dividend yield, the highest since the Great Recession, attracting long-term investors to consider its potential as a value investment.
See More
Home Depot Annual Shareholder Meeting Voting Results Announced
- Voting Results: At Home Depot's recent annual shareholder meeting, shareholders approved amendments to the certificate of incorporation extending exculpation for certain officers and adopted miscellaneous charter housekeeping changes, indicating strong support for corporate governance.
- Board Re-election: Shareholders re-elected the full slate of directors for one-year terms and ratified KPMG as auditor for the fiscal year ending January 31, 2027, reflecting confidence in the current management team and stability.
- Advisory Pay Resolution: The majority support for the advisory say-on-pay resolution indicates shareholder approval of the executive compensation structure, despite multiple shareholder proposals failing by wide margins, showcasing a consensus on the company's strategic direction.
- Executive Continuity: The voting results confirm that Ted Decker will continue in his dual role as chair and CEO, having served as CEO since March 1, 2022; however, shares remain slightly lower than when he took over, suggesting cautious market sentiment regarding his leadership.
See More
Investment Choices in Home Improvement Market Analysis
- Lowe's Performance Overview: In fiscal 2025, Lowe's achieved revenue of $86 billion, reflecting a growth of approximately 3%, with a net income of about $6.7 billion and a net margin of 7.7%, indicating its stability and profitability in the home improvement market.
- Home Depot Highlights: Home Depot reported nearly $165 billion in revenue for 2025, growing around 3.2%, with a net income of approximately $14.2 billion and a net margin of 8.6%, showcasing its strong performance and profitability in the market.
- Competitive Risk Analysis: Lowe's faces intense competition from retail giants like Walmart and Amazon, with its performance heavily reliant on the health of the housing market and consumer spending, while Home Depot is sensitive to high interest rates that may slow down large renovation projects.
- Valuation Comparison: Lowe's forward P/E ratio stands at 17x, lower than Home Depot's 20.7x, and its P/S ratio is 1.4x compared to Home Depot's 1.9x, indicating a more attractive value proposition and growth potential moving forward.
See More
Lowe's vs Home Depot: Market Competition Analysis
- Market Positioning Differences: Lowe's focuses on DIY consumers with 1,748 stores and $86 billion in revenue for fiscal 2025, yielding a net income of approximately $6.7 billion and a net margin of 7.7%, while Home Depot serves a broader customer base with nearly $165 billion in revenue and a net income of about $14.2 billion, reflecting a net margin of 8.6%.
- Financial Health Comparison: As of January 2026, Lowe's debt-to-equity ratio stands at 4.2 with a current ratio of approximately 1.1 and free cash flow nearing $7.7 billion; in contrast, Home Depot's debt-to-equity ratio is 5.1 with free cash flow reaching $12.6 billion, highlighting differing financial management strategies.
- Growth Potential Assessment: Analysts project Lowe's annual earnings growth at about 9%, surpassing Home Depot's 5%, while Lowe's forward P/E ratio of 17 is lower than Home Depot's 21, indicating that Lowe's may offer higher investment return potential in the current market environment.
- Competitive Risk Analysis: Lowe's faces intense competition from Walmart and Amazon, with its performance heavily reliant on the health of the housing market, whereas Home Depot may be impacted by high interest rates affecting large renovation projects, necessitating both companies to maintain competitiveness in pricing and service to avoid market share loss.
See More
Jim Cramer Recommends Four Stocks for New Investors
- Diversification Strategy: Jim Cramer emphasized the need for diversification even as artificial intelligence dominates the market, ensuring long-term stability in investment portfolios to mitigate risks associated with single-theme investments.
- Stock Recommendations: Cramer recommended four stocks for new members to buy, including Alphabet, Amazon, Apple, and Nvidia, all of which demonstrate strong growth potential, particularly in their AI-related businesses.
- Market Outlook: Despite challenges faced by Meta and Microsoft, Cramer remains cautiously optimistic about their future performance, suggesting that these companies could achieve breakthroughs in the evolving AI landscape.
- Emerging Investment Opportunities: Stocks like Arm Holdings and Broadcom are showing strong performance, particularly in the data center and AI chip sectors, reflecting robust market demand for related technologies, making them worth watching for long-term growth potential.
See More
Market Performance Review Since Last CNBC Investing Club Meeting
- Overall Market Performance: Since the April 16 meeting, the S&P 500 has risen by 6.7% and the Nasdaq by 10.6%, indicating a strong market rebound and significantly boosting investor confidence in equities.
- Outstanding Performance by Arm: Arm's stock surged 97.9% since our position initiation, driven by robust demand expectations for CPUs, particularly in the AI sector, with projected revenues of $20 billion this year greatly enhancing its royalty business.
- Cybersecurity Stocks Rebound: CrowdStrike and Palo Alto Networks saw increases of 60.6% and 53.8%, respectively, and despite ZScaler's negative impact, the market remains optimistic about their growth prospects, with price targets raised by multiple Wall Street firms.
- Underperformance of Meta and Home Depot: Meta's stock fell 9.5% primarily due to investor concerns over its spending on generative AI, while Home Depot dropped 7.9% as high mortgage rates dampened growth expectations, reflecting a lack of confidence in their future performance.
See More
