Ahead of Home Depot Earnings, Here's What Barchart Data Says Comes Next for HD Stock

Home Depot (HD) shares are facing a sell-off ahead of the company's Q2 earnings release on August 18. Investors are wary of the stock's performance following the earnings announcement, with consensus calling for earnings per share (EPS) of $4.71, a meager 0.64% increase year-over-year. The home improvement retailer has been a lackluster investment in 2026, losing roughly 2% year-to-date.

Options contracts expiring on August 21 reveal a bearish skew, as put volume significantly outpaces call volume at a ratio of 1.48x. This indicates a potential 3.63% decline in HD shares to under $350 by the end of the week. The technical setup also supports this bearish sentiment, with Home Depot's stock crashing below its 20-day moving average on Monday, signaling that bears now control the near-term outlook for the stock.

The cautious options market sentiment is a reflection of growing concerns over persistent macro headwinds affecting consumer spending. Higher mortgage rates and a struggling housing market continue to hinder home turnover, impacting demand for large-scale remodeling and DIY projects. As consumers prioritize essential repairs over major renovations, Home Depot's top-line growth is expected to face challenges.

Profitability may also be threatened by rising labor costs and integration expenses from recent acquisitions, including SRS Distribution. These factors could lead to margin compression, making it increasingly difficult for Home Depot shares to rebound meaningfully in the second half of 2026. Wall Street analysts remain optimistic about HD stock heading into the Q2 release, despite the current concerns.

The consensus rating stands at "Moderate Buy," with a mean price target of nearly $373, suggesting a potential 10%+ rally over the next year.