Does Home Depot’s Cautious 2026 Outlook And Security Issue Change The Bull Case For HD?

• Earlier this week, Home Depot reaffirmed its fiscal 2025 guidance and issued a cautious 2026 outlook, pointing to ongoing housing market softness, restrained discretionary project spending, and a modest sales and earnings growth profile while it prioritizes Pro customer relationships and integrates recent acquisitions.
• The update also flagged a recent security issue involving leaked internal credentials, adding an operational risk angle to an already macro-sensitive business story built around housing demand and professional contractor activity.
• Next, we’ll examine how Home Depot’s cautious 2026 growth outlook and focus on Pro customers may reshape the existing investment narrative.

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Home Depot Investment Narrative Recap

To own Home Depot, you need to believe that its scale, Pro-focused ecosystem, and investments in logistics and technology can translate modest sales growth into durable cash generation, even while housing turnover stays muted. The latest guidance reset and cautious 2026 outlook largely reinforce, rather than change, the near term picture: the key catalyst remains a eventual pickup in larger projects, while the biggest watchpoint is margin pressure as earnings growth lags revenue.

The most relevant update here is management’s fiscal 2025 and preliminary 2026 guidance, which calls for about 3% total sales growth in 2025 and only flat to low single digit EPS growth into 2026. That outlook aligns with the recent commentary that weak discretionary remodeling and softer same store sales are limiting near term upside, making Home Depot’s push to deepen its Pro relationships and monetize recent acquisitions even more central to the thesis.

But investors should also be aware that rising inventory levels and softer earnings growth leave less room for error if...

Read the full narrative on Home Depot (it's free!)

Home Depot's narrative projects $182.4 billion revenue and $17.4 billion earnings by 2028.

Uncover how Home Depot's forecasts yield a $398.52 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Six fair value estimates from the Simply Wall St Community span roughly US$278.85 to US$398.52, underscoring how far apart individual views can be. When you set those opinions against Home Depot’s guided flat to low single digit EPS growth, it becomes even more important to compare different assumptions about housing demand and margin resilience before making up your mind.

Explore 6 other fair value estimates on Home Depot - why the stock might be worth 20% less than the current price!

Build Your Own Home Depot Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Home Depot research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Home Depot research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Home Depot's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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