D.A. Davidson reiterates Home Depot stock Buy rating on comp growth

D.A. Davidson has reaffirmed its Buy rating and set a $377.00 price target on Home Depot stock (NYSE:HD). This aligns with the majority of analysts who have also rated the stock as a Buy, with price targets ranging from $310 to $430. Home Depot's stock is currently priced at a P/E ratio of 24.02 and boasts a substantial market capitalization of $337.8 billion.

The firm highlighted that Home Depot's comparable sales increased by 1.7% overall and 1.3% in the United States, marking both a rise from the previous quarter and the most robust comparable performance in years. The two-year trend also demonstrated acceleration. Although earnings per share surpassed expectations, the growth can be attributed to tariff refunds.

The company has reiterated its guidance, with the unforeseen tariff advantage compensating for higher, unplanned input costs. D.A. Davidson believes the most challenging phase of the downward trend in the industry is likely over. According to InvestingPro Tips, Home Depot has raised its dividend for 16 consecutive years, providing investors with a yield of 2.76%.

The platform offers six additional tips for HD subscribers and assigns a FAIR financial health rating. However, the firm advises that home-related spending may continue to face obstacles as interest rates rise. Home Depot is scheduled to publish its second-quarter fiscal 2026 earnings report on August 18, with Barclays anticipating the results to align with the consensus estimates, notwithstanding challenges in the housing market and consumer uncertainty.

Stifel has recently increased its price target for Home Depot shares to $340, from $320, while preserving a Hold rating, reflecting updated estimates ahead of the earnings report. Ted Decker, Home Depot's chair, president, and CEO, has taken a short-term medical leave of absence, with two executives designated to manage the company's operations during his absence.

Evercore has revised its growth forecast for the home improvement sector in 2026, projecting a 2% increase from the previous estimate of 1%, based on the favorable first-half performance. Despite these updates, Barclays acknowledges that demand in the home improvement category remains stable to slightly improving, which is expected to bolster the upcoming financial results.