As Home Depot prepares to announce its fourth-quarter financial results, investors and market strategists are closely scrutinizing various indicators to predict the company's performance and its potential impact on the stock market. Analysts forecast a revenue of $38.18 billion, a slight decrease from the previous year's $39.7 billion, and an earnings per share of $2.52, down from $3.13. Despite some recent misses in EPS estimates, the company has historically shown resilience in exceeding revenue projections.
Jay Woods, Chief Market Strategist at Freedom Capital Markets, notes that Home Depot's stock is currently at a critical juncture. He points out a recurring pattern in the stock's performance following recent earnings reports, suggesting a potential for an upward swing after the upcoming announcement. Woods emphasizes the significance of the $376 mark, representing the 200-day moving average, and identifies $390 as a crucial level for a sustained rally towards its previous high of $420. Conversely, a dip below current levels might present a more favorable entry point for investors around the $355 to $360 range.
Analyst ratings reflect a mixed but generally positive outlook. While some firms like Piper Sandler and RBC Capital have slightly lowered their price targets, they maintain optimistic ratings such as 'Overweight' and 'Sector Perform'. Bernstein and Citigroup, on the other hand, have increased their price targets, reiterating 'Market Perform' and 'Buy' ratings respectively. Telsey also maintains an 'Outperform' rating with a strong price target.
Beyond the raw numbers, several strategic elements will be under close watch. Home Depot's expanded partnership with Google Cloud, focusing on agentic AI tools for enhanced customer and professional guidance, is a key area of interest. Details on how these AI capabilities contribute to customer base expansion and revenue growth will be crucial. Furthermore, recent reports of job cuts and return-to-office mandates for corporate employees could influence discussions on margins and future guidance. The company's third-quarter results were impacted by weather conditions, particularly a lack of storms affecting demand for certain products, making the assessment of weather's role in Q4 performance vital.
Home Depot's position as a significant component of the Dow Jones Industrial Average means its earnings report will likely influence the broader market, including ETFs tracking the index. Its primary competitor, Lowe's Companies, is also set to release its Q4 results later in the week, and Home Depot's performance could set the tone for the sector. While Home Depot's stock has seen an 8.7% increase year-to-date in 2026, it is down 1.7% over the past 52 weeks, positioning it as one of the 'Dogs of the Dow' — high-yielding stocks that often attract strong investor interest. In contrast, Lowe's stock has performed more strongly over both periods.
The upcoming earnings call will offer critical insights into Home Depot's operational efficiency, strategic technological advancements, and its response to broader economic and market trends, shaping investor sentiment and market dynamics in the home improvement retail sector.
