Will Reputation and Supply Chain Pressures Change Home Depot's (HD) Investment Narrative?

• In recent days, Home Depot experienced a small drop in store traffic despite posting higher overall sales, attributed to necessary price increases that have tempered customer spending.
• Protests related to immigration enforcement actions at Home Depot locations, combined with ongoing supply chain concerns, have brought new focus to the company’s reputation and operational stability.
• We'll assess how these reputation and supply chain concerns could influence Home Depot's investment narrative moving forward.

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Home Depot Investment Narrative Recap

To be a Home Depot shareholder today, you have to believe in the company's ability to grow through operational investments, supply chain improvements, and a stable base of DIY and Pro customers, even as higher prices and soft store traffic introduce near-term uncertainty. The recent protests and supply chain disruptions have added short-term headline risk but do not appear to materially change the main catalyst, improvements in supply chain technology and Pro ecosystem expansion, or the centerpiece risk of sustained softness in larger renovation projects.

Among recent announcements, Home Depot reaffirmed its full-year 2025 guidance of modest sales growth and an expected decline in diluted earnings per share. This context highlights ongoing cost and margin pressures, reinforcing why operational stability and demand recovery remain critical to the stock’s short-term direction. In contrast, longer-term investors should remain alert to the risk that sustained consumer hesitation on big-ticket remodels could...

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

Home Depot's narrative projects $182.4 billion in revenue and $17.4 billion in earnings by 2028. This requires 3.4% yearly revenue growth and an increase of $2.8 billion in earnings from the current $14.6 billion.

Uncover how Home Depot's forecasts yield a $437.81 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span a wide range between US$304 and US$438 per share. While many believe in the company's long-term tech investments and renovation demand, opinions differ widely about the impact of current customer hesitation on projected returns.

Explore 5 other fair value estimates on Home Depot - why the stock might be worth 19% 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 2 important warning signs 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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