Home Depot: Dodges The President's Ire But Not The U.S. Consumer

Summary

• Home Depot posted mixed Q1 FY25 results, with revenue beating estimates but EPS and comparable sales slightly missing expectations amid a challenging macro environment.
• Management reaffirmed full-year guidance and is fast-tracking sourcing diversification to avoid tariff impacts, aiming to keep prices stable and defend market share.
• Despite positives like the SRS acquisition and growth in the Pro segment, weak consumer sentiment and high rates continue to suppress big-ticket spending and remodeling cycles.
• With valuation still above historical norms and limited near-term growth catalysts, I maintain my Hold rating and set a lower price target of $365 per share.

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Investment Thesis

In my last article on The Home Depot, Inc. (NYSE:HD), published in November 2024, I analysed the key takeaways from the company’s Q3 FY24 report and dissected the management commentary on

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.