Home Depot Stock: Analysts Weigh In on Future Performance and Comparisons with Lowe’s

As of November 12, 2024, Home Depot Inc. (HD) stock is trading at $408.29, reflecting a slight increase of 0.59%. The company, a leading home improvement retailer, has been under scrutiny by analysts who are evaluating its performance and potential against its main competitor, Lowe’s (LOW).

Analysts from TipRanks and other financial platforms have highlighted key differences and similarities between Home Depot and Lowe’s. Both companies are well-managed and have strong competitive moats, but they differ in their valuation and shareholder returns. Home Depot distributed approximately $8.63 billion in dividends and repurchased $3.7 billion in shares over the last 12 months, resulting in a dividend yield of 2.18% and a buyback yield of less than 1%.

In contrast, Lowe’s distributed $2.53 billion in dividends and repurchased $3.71 billion in shares, achieving a dividend yield of 1.66% and a buyback yield of 2.4%. This makes Lowe’s more generous in terms of share repurchases compared to Home Depot.

When it comes to valuations, Home Depot is projected to experience a modest decline in earnings per share (EPS) of -0.8% and a slight revenue increase of 3% in 2025. The stock currently trades at a forward price-to-earnings (P/E) ratio of 27x, which is nearly a quarter above its five-year historical average. Lowe’s, however, faces more pessimistic projections with a 10.5% drop in EPS and a 4% decline in revenues during 2025, trading at a discounted forward P/E of 23x.

Despite these projections, both stocks are rated positively by analysts. Home Depot is rated as a Strong Buy by 26 Wall Street analysts, with an average price target of $425.96, implying upside potential of nearly 5%. Lowe’s is rated a Moderate Buy by 24 analysts, with an average price target of $282.04, suggesting upside potential of about 4%.

The upcoming earnings report for Home Depot, scheduled for November 12, 2024, will provide further insights into the company’s financial health and future outlook. Analysts are cautious about the impact of inflation, rising interest rates, and a cooling housing market, but they remain bullish on both Home Depot and Lowe’s due to their strong market positions and potential benefits from a lower interest rate environment.