Home Depot Q3 Preview: Will Housing Weakness And Costly Mortgages Pressure The Retailer?
Home improvement retailer Home Depot Inc. (NYSE:HD) could provide a look at how the industry is performing when the company reports third-quarter financial results on Tuesday before the market opens.
Here are the earnings estimates, what experts are saying ahead of the report and key items to watch.
Earnings Estimates: Analysts expect Home Depot to report third-quarter revenue of $41.14 billion, up from $40.22 billion in last year's third quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates for revenue in six of the last 10 quarters overall, missing estimates in the most recent second quarter.
Analysts expect Home Depot to report third-quarter earnings per share of $3.85, up from $3.78 in last year's third quarter. The company has missed analyst earnings-per-share estimates in two straight quarters, while beating estimates in eight of the previous 10 quarters overall.
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What Experts Are Saying: Bank of America Securities analyst Robert F. Ohmes expects Home Depot to report comparable sales growth of 1.3%, noting strong trends in August and a soft October.
The analyst maintained a Buy rating and a $450 price target ahead of the earnings report.
Ohmes highlighted the company's Pro segment with the acquisition of Gypsum Management & Supply in September, which adds more products and offerings for customers.
High mortgage rates and weak home sales turnover are trends to watch, noted by the analyst.
Freedom Capital Markets Chief Market Strategist Jay Woods also noted the slow housing market and "stubbornly high mortgage rates" as items that could be holding the stock back from rallies.
"While the stock has been volatile all year, earnings have not been a major event from a price action viewpoint," Woods said in a weekly newsletter. "Shares have rallied after 4 of the last 8 results with an average move of +/- 2.4%."
Woods said investors will get a deeper look at how housing trends are impacting the home improvement retailer.
"Watch for comps growth, average ticket size, and whether large-scale projects are back or still delayed."
Woods said margin commentary and any update on full-year guidance will be key details to watch.
Here are other recent analyst ratings on Home Depot and their price targets:
- Stifel: Downgraded from Buy to Hold rating, lowers price target from $440 to $370
- Telsey: Maintained Outperform rating, with price target $455
- Wells Fargo: Maintained Overweight rating, lowered price target from $450 to $435
- JPMorgan: Maintained Overweight rating, lowered price target from $452 to $444
Key Items to Watch: A recent report from Placer.ai shows Home Depot saw an improvement in visits in the third quarter.
After posting year-over-year visit declines of 1.9%, 1.2%, and 3.8% in April, May, and June, respectively, the retailer saw third-quarter visits down just 0.4% year-over-year.
Broken down by month, visits were down 0.9%, up 1.2% and down 1.4% for the months of July, August, and September, respectively.
The report showed October visits down 0.6% year-over-year.
This marked an improvement and could point to potential upside in the third quarter and guidance as the pullback in large home improvement projects in late 2024 and early 2025 could be over. The report showed a smaller gap in visits than in past quarters, marking a potential turnaround.
For comparison, Lowe's Companies (NYSE:LOW) saw visits decline 0.1% year over year in the third quarter.
Placer.ai also noted that the Gen Z demographic could be providing future home improvement demand for the retailer and its rival Lowe's. Home Depot may be targeting this segment already with new creator programs for the next generation of DIYers, the report said.
Home Depot CEO Ted Decker said the retailer had momentum, citing a rise in smaller home improvement projects after second-quarter financial results. Investors will like to see the same discussion on momentum in the third quarter and continuing through the end of the fiscal year.
The company reiterated its full-year sales outlook of 2.8% year-over-year growth and a 1.0% comparable sales growth rate for the fiscal year. Analysts and investors will be watching to see if this guidance is updated at all.
Home Depot reports its quarterly financial results one day ahead of rival Lowe's. The rival home improvement retailer has a similar financial trajectory, with shares down almost the same amount in 2025.
Lowe's has beaten analyst estimates for earnings per share in 10 straight quarters, while beating analyst estimates for revenue in six of the last 10 quarters. This is nearly identical to Home Depot, with Lowe's slightly better on earnings-per-share forecasts.
While Home Depot and Lowe's stock could both be volatile on Tuesday and Wednesday alongside their respective earnings reports, the Dow Jones Industrial Average could also be on watch.
Home Depot is the fourth largest holding in the SPDR Dow Jones Industrial Average ETF (NYSE:DIA), which tracks the well-known index, with 4.73% of assets. Home Depot is one of the largest holdings due to the price-weighted structure of the index.
HD Price Action: Home Depot stock was down 1.19% to $358.03 on Monday versus a 52-week trading range of $326.31 to $439.37. Home Depot stock is down 7.8% year-to-date in 2025.
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