Home Depot Inc (NYSE:HD, XETRA:HDI) is well-positioned for long-term growth, UBS analysts said following the home improvement retailer’s investor and analyst conference, citing strategic investments and realistic near-term guidance.
“The framework that Home Depot provided…balances enough potential for the stock to warrant a premium multiple, while keeping near-term expectations in check,” UBS analysts wrote in a note this week. “Shareholders can be rewarded for patience by the company generating outsized earnings gains as the recovery takes hold.”
Analysts highlighted Home Depot’s progress in areas such as interconnected retail, pro customer share gains, and technology deployment, alongside initiatives using artificial intelligence to enhance customer experience and productivity. Management also outlined potential growth drivers, including bolt-on acquisitions, new store development, and leveraging its ecosystem.
Home Depot has expanded its total addressable market to $1.1 trillion and is aiming to consolidate wallet share among a fragmented customer segment. UBS said the company’s 2026 outlook “gave realistic expectations on how the home improvement recovery will gradually unfold,” with preliminary EPS guidance for next year around $14.75 to $15.
Analysts added that the company’s base-case scenario assumes a 4–5% comparable sales increase and 5–6% total sales growth driven by organic investments, pro share gains, and recent acquisitions of SRS and GMS.
“Home Depot continues to expect operating margin expansion even as it reinvests in the business,” UBS noted, suggesting 10–20 basis points of margin improvement in the base case.
The upside scenario, UBS said, hinges on a faster housing recovery, where Home Depot could see double-digit earnings growth. “Even in a muted demand environment, the company still expects to gain roughly 100 basis points of market share next year,” the analysts commented.
UBS rates Home Depot shares as a Buy, with a 12-month price target of $430, implying roughly 25% upside from current prices.