Stifel Slashes Home Depot (HD) Rating Ahead of Q3 Earnings—Here’s the Red Flag
Wall Street's favorite pastime? Downgrading giants right before earnings season. Stifel just took a hammer to Home Depot's stock rating—and the timing reeks of tactical pessimism.
Why the bearish turn? Analysts cite 'macroeconomic headwinds' (read: everyone's scapegoat for weak guidance). Never mind that HD crushed Q2 or that housing demand remains bulletproof—apparently, the DIY boom has a shelf life.
Bonus cynicism: This feels less like analysis and more like hedging institutional bets before retail investors get the numbers. Classic Wall Street—downgrade first, ask questions during the earnings call.
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Stifel Analyst Moves to the Sidelines on Home Depot Stock
While Carter believes the long-term drivers of the home improvement sector are solid, he thinks the near-term outlook is too tough to maintain a positive stance. Consequently, the analyst lowered his estimates for Home Depot and Lowe’s (LOW) for the second half of Fiscal 2025 and for Fiscal 2026 and 2027. These revised estimates reflect a weaker second half of 2025 and a slower recovery for the overall home improvement market. The analyst’s projections are now well below the Street’s consensus expectations.
Additionally, Carter expects Home Depot’s third-quarter 2025 results and management’s commentary to show softer same-store sales than originally expected. This weakness may raise questions about Home Depot’s Complex Pro strategy, especially given that the company has spent more than $20 billion on mergers and acquisitions ahead of its December Investor Day.
Recently, JPMorgan lowered its price targets for Home Depot and Lowe’s. Meanwhile, Wall Street expects Home Depot to report a 4.5% year-over-year rise in Q3 FY25 adjusted earnings per share (EPS) to $3.84. Revenue is expected to grow 2.4% to $41.2 billion.
Is HD a Good Stock to Buy?
Heading into Q3 earnings, Wall Street has a Strong Buy consensus rating on Home Depot stock based on 20 Buys and six Holds. The average HD stock price target of $443 implies 20.4% upside potential. HD stock is down 5.4% year-to-date.
