Bank of America reinstates Home Depot with Buy rating, sets $374 price target
The Home Depot projects fiscal 2026 sales growth of 2.5% to 4.5%, with adjusted earnings per share growth ranging from flat to 4%, as the company plans to open approximately 15 new stores this year.
Bank of America has reinstated coverage of The Home Depot with a Buy rating and a price target of $374, designating the retailer as its preferred stock within the home improvement sector. The decision follows strong comparable growth driven by higher Professional customer penetration and resilient customer traffic trends that the analyst firm believes outpace competitors. The price target implies an upside potential of 20% from the share price at the time of reporting.
The home improvement giant projects total sales growth of approximately 2.5% to 4.5% for fiscal year 2026. Adjusted earnings per share growth is expected to range from flat to up 4% from the $14.69 delivered in fiscal year 2025. This outlook reflects a disciplined operating approach focused on cost control and steady demand capture, rather than relying on assumptions of a cyclical recovery.
In terms of physical expansion, The Home Depot plans to open approximately 15 new stores in the ongoing year. The company currently operates over 2,300 retail stores across the United States, including all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam, as well as in Canada and Mexico.
The retailer offers an annual dividend yield of 2.99%, positioning it as a significant blue-chip dividend stock. Bank of America highlighted the company’s ability to capture steady demand through its Pro customer base as a key differentiator in the current market environment.
While the analyst firm acknowledges the potential of Home Depot as an investment, the broader context of the report included a separate recommendation for an undervalued AI stock benefiting from Trump-era tariffs and onshoring trends. This distinction separates the core Home Depot analysis from other promotional content within the source material.
The reinstatement of coverage comes as the company maintains its position as the largest home improvement specialty retailer globally. The focus on disciplined execution and Pro customer growth suggests a strategy aimed at sustaining margins and traffic in a competitive retail landscape.
