Is Home Depot (HD) a Buy Ahead of Q3 Earnings?

Home Depot (HD), the home improvement retail giant, faces a critical test as it prepares to release its Q3 earnings on November 18. The stock has slumped 12% over the past year, weighed down by sluggish demand for large-scale home projects and the dampening effect of higher interest rates on housing activity. Analysts note persistent softness in store traffic and big-ticket spending, tempering near-term growth expectations.

Wall Street anticipates earnings per share of $3.84, a modest 1.6% year-over-year increase, with revenues projected to rise 2.5% to $41.15 billion. The focus will extend beyond these headline figures to underlying metrics like renovation demand and discretionary spending patterns. With mortgage rates at elevated levels and housing inventory tight, any positive signals on consumer resilience could shift market sentiment.

The earnings guidance may prove decisive. While current conditions remain challenging, many analysts maintain a constructive outlook, betting on demand recovery once monetary policy eases and home improvement cycles normalize. The market will scrutinize management's commentary for clues about the timing and magnitude of this potential rebound.