HD Should I Buy
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Home Depot Inc is not a strong buy at this moment for a beginner investor with a long-term strategy. While the company is fundamentally strong and has a stable position in the home improvement market, the current technical indicators, mixed analyst sentiment, and lack of immediate positive catalysts suggest that waiting for a clearer entry point would be prudent. Additionally, the upcoming earnings report on February 24 could provide further clarity on the company's performance and outlook.
The technical indicators are mixed. The MACD is negatively expanding, indicating bearish momentum. RSI is at 35.355, which is neutral but leaning toward oversold territory. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but the stock is trading near key support levels (S1: 379.118). The price trend suggests a potential downside in the short term.
Analysts have raised price targets recently, with some projecting a long-term recovery in the housing market.
Congress trading data shows balanced activity, with significant purchase transactions indicating potential confidence in the stock.
The company's gross margin increased slightly YoY, showing operational efficiency.
Net income and EPS have declined YoY in the latest quarter, reflecting some profitability challenges.
The upcoming earnings report could introduce volatility, especially if results or guidance disappoint.
The broader market sentiment is neutral to bearish, with the S&P 500 down 0.26%.
In Q3 2026, revenue increased by 2.82% YoY to $41.35 billion, but net income dropped by 1.29% YoY to $3.6 billion. EPS also declined by 1.36% YoY to $3.62. The gross margin improved slightly to 31.41%, up 0.03% YoY, indicating stable operational efficiency despite profitability challenges.
Analyst sentiment is mixed. Recent upgrades include price targets raised to $450 by Citi and TD Cowen, citing long-term growth potential. However, some firms, like RBC Capital, have lowered targets, citing uncertainties in the housing market recovery. Overall, analysts remain cautiously optimistic about Home Depot's long-term prospects but acknowledge near-term challenges.
