HD Stock: Is Home Depot a Buy After a 25% Drop?

Home Depot's stock price has dropped by roughly 25-27% over the past year, but the company's fundamentals remain strong. Despite a 5.7% year-over-year increase in Q2 FY2026 sales, the stock is still trading below its 52-week high of $426.75.

The decline can be attributed to the housing cycle and higher interest rates, which have suppressed large-ticket remodeling demand. This has affected Home Depot's ability to grow sales through discretionary projects such as kitchen renovations, deck rebuilds, and bathroom overhauls.

However, analysts rate Home Depot a 'Buy' with average price targets of $370-$377, implying ~23% upside from recent levels. This is contingent on a housing recovery and rate cuts that have not yet clearly begun.