Home Depot's Turnaround Signal Ignites Bullish Predictions

Home Depot's recent Q2 fiscal 2026 results show a clear turnaround signal, but its stock price remains 20% below its 52-week high. Despite analysts' 'buy' ratings, investors are still discounting the company's operating leverage.

The company's revenue grew 5.71% to $47.86 billion in Q2, with adjusted diluted EPS reaching $4.92 and comparable sales turning positive at 1.7%. Management attributed the results to exceeding expectations, citing accelerating monthly U.S. comps from 0.5% in May to 2.2% in July.

The bull case for Home Depot hinges on operational leverage meeting a housing thaw. The company's SRS Distribution comped above its average, with 90% of stores closed an SRS sale in the past 12 months. Management targets $400 million in system-wide cross-selling this year.