Recently, Zacks.com users have been paying close attention to Home Depot (HD). This makes it worthwhile to examine what the stock has in store.
Question: Why put your money into Home Depot stock (NYSE: HD) at a price-to-earnings ratio of 28, when Lowe's stock (NYSE: LOW) is offered at a lower ratio of 22? In fact, you might, particularly when you take into account these straightforward facts:
Home Depot has had flat EPS growth since 2021. Share price has improved in the past 3 years, largely because of multiple expansion. Recent acquisitions have boosted revenue, but margin pressure has stalled EPS growth. The current valuation looks expensive, justified only if Home Depot can return to 10-12% EPS growth.
One analyst says a pullback in promotional deals raised prices, possibly due to “a desire to protect margins in a tariffed environment.”
Lowe's stock gains after it beat earnings expectations a day after Home Depot missed. Lowe's also announced it was buying a bigger building-products company than its rival did in June.
The Home Depot, Inc. (NYSE:HD ) Q2 2025 Earnings Conference Call August 19, 2025 9:00 AM ET Company Participants L - Corporate Participant e - Corporate Participant s - Corporate Participant a - Corporate Participant R - Corporate Participant h - Corporate Participant e - Corporate Participant v - Corporate Participant Ann-Marie Campbell - Senior Executive Vice President Edward P. Decker - Chairman, President & CEO Isabel Janci - VP of Investor Relations & Treasurer Richard V.
Homeowners may have reason to be more comfortable financing renovations, but Home Depot isn't counting on a shift in their mindset.
The nation's largest home improvement chain said during an earnings call on Tuesday that pricing changes would affect specific product categories.
Investors are bracing themselves for weak earnings reports from many of the bellwether retail stocks reporting earnings this week. That may explain why investors are mildly bullish on Home Depot NYSE: HD after a better-than-feared earnings report.
A primary reason for the underperformance is the broader operating environment, which remains a difficult one for these home improvement chains.
HD's Q2 earnings and sales miss estimates, but year-over-year growth and reaffirmed 2025 guidance highlight resilience.