Shares of Home Depot Inc (NYSE:HD) rallied on Wednesday, after the company reported upbeat second-quarter results.
Here are the key analyst takeaways:
- RBC Capital Markets analyst Steven Shemesh reiterated a Sector Perform rating, while cutting the price target from $343 to $342.
- Guggenheim Securities analyst Steven Forbes reaffirmed a Buy rating and price target of $425.
- JPMorgan analyst Christopher Horvers reiterated an Overweight rating and price target of $396.
- KeyBanc Capital Markets analyst Bradley Thomas maintained a Sector Weight rating on the stock.
Check out other analyst stock ratings.
RBC Capital Markets: Home Depot’s total company comp sales grew 1.7%, "led entirely" by an acceleration in ticket growth to 2.8%, which was partially offset by a 1.0% decline in transactions, Shemesh said in a note. While the company delivered headline beats, the results would likely have been disappointing if not for lumber inflation and tariff refunds, he added.
Gross margins benefited from $685 million worth of IEEPA tariff refunds, slightly offset by higher transportation costs and the GMS and Mingledorff acquisitions, the analyst stated. "Mgmt shared that this qtr, several cost pressures (fuel & energy + product input costs) emerged beyond what was originally planned when entering FY’26," he further wrote.
Guggenheim Securities: Home Depot’s operating results broadly exceeded expectations, driven by broad-based strength across geographies and product categories, Forbes said. The company delivered a topline beat of around 1.2%, with US comps of 1.3%, and an adjusted EBITDA upside of around 1.5%, he added.
"Importantly, although management’s reiterated full-year outlook now includes the benefit of IEEPA tariff refunds, these funds are expected to only partially offset unplanned fuel, energy, and other product input costs," the analyst wrote. This implies that Home Depot’s operating model will not carry "any transient margin benefits" into 2027, he further stated.
JPMorgan: Home Depot reported better-than-expected same-store sales and, excluding "weather noise," trends were "relatively consistent" through the quarter, Horvers said. He noted two reasons to believe that the company’s sales growth could accelerate:
- Improving housing markets on the east and west coasts – This bodes well for Home Depot given its geographic footprint and efforts to gain share with Pro and DIY.
- The company will "annualize against the 50-60 bp storm headwind," while SRS increasingly contributing to comp in the back half of the year.
"FY26 guide remains unchanged, although it now includes tariff refunds," the analyst further wrote.
KeyBanc Capital Markets: While the industry backdrop continues to be challenging, Home Depot’s comps improved sequentially due to market share gains and strong performances from Canada, Mexico, and SRS, Thomas said. The company received $730 million in tariff refunds, of which $685 million have flowed through the cost of goods, he added.
"These tariff refunds helped offset unplanned pressure from fuel, energy, and other input costs," the analyst wrote. Excluding the tariff benefit, Home Depot’s gross margin would have contracted by 117 basis points (bps) year-on-year, he noted.
The tariff refunds are now incorporated into the company’s reiterated 2026 earnings guidance and could be "a margin overhang into 2027," Thomas further stated.
HD Stock Price Activity: Home Depot shares were up 1.69% at $342.83 during premarket trading on Wednesday, according to Benzinga Pro data.
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