HD Stock: Stifel Turns More Cautious Ahead Of Earnings Report, Warns Of Cooling Demand

• Stifel said Home Depot’s recent data shows weaker-than-expected comparable sales momentum.
• The firm also lowered its outlook for the second through fourth quarters.
• Analysts expect the home improvement retailer to post a Q1 revenue of $41.5 billion.

Home Depot (HD) has drawn attention after Stifel reduced its price target on the home improvement retailer to $320 from a previous $375, while reiterating a ‘Hold’ rating, ahead of its fiscal first-quarter (Q1) earnings on Tuesday. 

The adjustment reflects a more cautious stance on near-term demand trends across the home improvement industry, as investors seek clearer signals on consumer spending and housing-related activity.

Stifel Cites Cooling Demand Trends For HD

In its latest note, Stifel indicated that Home Depot’s recent performance data points to weaker-than-expected momentum in comparale sales, according to TheFly. 

The firm also adjusted expectations for the second through fourth quarters, now modeling relatively flat sales growth as broader economic conditions continue to weigh on discretionary renovation activity. 

The updated projections signal a shift in expectations for the home improvement sector, which has benefited in prior years from elevated remodeling activity and pandemic-era housing demand. 

Home Depot stock inched 0.7% higher overnight, heading into Tuesday. 

On Friday, Piper Sandler also trimmed its price target slightly to $421 from $422 while maintaining an ‘Overweight’ rating.

Piper Sandler said tax refund activity during Q1 stood out but did not clearly translate into a measurable lift in retail spending, suggesting that many middle- and upper-income households may have opted to save rather than spend those funds. 

Q1 Expectations For HD 

Home Depot is expected to report its Q1 earnings on Tuesday, with analysts seeing a revenue of $41.5 billion and earnings per share of $3.41, according to Fiscal AI data. 

The company heads into earnings after a recent sharp downturn in its share price, with its stock falling over 14% in the past month. 

A central theme heading into results is the company’s accelerating shift toward professional contractors, a segment management has prioritized amid constrained housing turnover. 

With homeowners less likely to relocate due to higher mortgage rates, renovation activity has increasingly concentrated around essential upgrades and large-scale contractor-led projects. 

This structural shift is expected to play a major role in determining whether Home Depot can stabilize comparable sales despite weaker discretionary demand from casual shoppers.

HD stock has declined nearly 13% year-to-date. 

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