Truist Sees Long-Term Upside for Home Depot (HD) Amid Tight Housing Supply

Core Viewpoint - Truist has raised its price target for The Home Depot, Inc. to $390, indicating long-term optimism despite near-term caution regarding consumer spending and housing market conditions [2][3]. Group 1: Market Outlook - Truist's analysis suggests that there is a significant untapped demand in the home improvement sector, with over $35 trillion in home equity available for homeowners to invest back into their properties [2]. - The company is expected to face challenges in fiscal 2026, with projected comparable sales growth and profit below analysts' expectations due to a cooling demand for DIY projects and large purchases [3][5]. Group 2: Consumer Behavior - Consumers are becoming more selective in their spending, focusing on value as they pull back on expensive renovations and large projects due to high borrowing costs [4][5]. - The management of The Home Depot has acknowledged the uncertainty in housing demand, which has been uneven and pressured by rising unemployment and elevated home prices [4]. Group 3: Financial Projections - The company forecasts fiscal 2026 same-store sales growth to range from flat to 2%, which is below the average analyst estimate of 2.34% [5]. - Adjusted EPS growth is expected to be flat to 4%, compared to a higher expectation of 5.6% from analysts [5].