We upgraded Home Depot and raised our price target. It made the best of a terrible hand
Home Depot reported a very good quarter, executing well on things it can control.
TL;DR
- Home Depot's second-quarter revenue rose 5.7% year over year to $47.86 billion, exceeding expectations.
- Earnings per share (EPS) increased 5.1% to $4.92, also beating LSEG estimates.
- Same-store sales increased 1.7%, significantly outperforming the 0.9% estimate.
- The company is focusing on operational improvements, including faster delivery for Pro and DIY customers, and increased focus on Pro customers.
- Pro customers outperformed DIY customers, though large discretionary projects remain under pressure.
- Analysts upgraded Home Depot stock to a 'buy-equivalent 1' rating with a raised price target, citing attractive long-term upside.
- Sales leveraging digital platforms increased 11% year over year, marking the fifth consecutive quarter of double-digit growth.
- Home Depot received approximately $685 million in tariff refunds, which were used to offset rising cost pressures.
- The company reaffirmed its 2026 outlook for sales growth and same-store sales growth.