Why Home Depot Stock Withered on Wednesday

Core Viewpoint - Home Depot's stock decline was primarily driven by a series of post-earnings price target cuts from analysts following the release of its third-quarter results [1] Financial Performance - Home Depot reported a year-over-year sales growth of nearly 3% to $41.4 billion, largely attributed to a recent acquisition of construction materials company GMS [3] - Same-store sales showed only marginal increases, and net income per share under GAAP decreased by 1% to $3.62 [3] Analyst Reactions - Analysts had anticipated higher profitability, but while Home Depot exceeded revenue expectations, it adjusted its full-year guidance to reflect slightly higher sales growth projections but lowered per-share earnings expectations [4] - RBC Capital's Steven Shemesh revised his fair price estimate for Home Depot from $401 to $376, citing concerns over softened demand and potential economic challenges [4][5] Market Outlook - The outlook for Home Depot appears bleak, particularly as the construction sector often suffers first during economic downturns, raising concerns for retailers supplying this sector [6] - Analysts are suggesting that there may be better investment opportunities in the retail space compared to Home Depot at this time [6][7]