Home Depot Shares Face Pressure Ahead of Earnings Report

Home Depot's stock is experiencing a sustained downward trend as investors grow increasingly cautious ahead of Tuesday's quarterly earnings release. The home improvement retailer closed Friday's session at $362.36, marking a 1.55% decline and extending its losing streak to three consecutive trading days.

The home improvement giant finds itself navigating turbulent waters, with shares declining 4.54% over the past ten trading sessions. The monthly performance shows an even steeper 6.68% drop, while year-to-date figures reveal a substantial 10.69% decrease. This persistent selling pressure has cast a shadow over what was once considered a retail sector standout.

Analyst Community Shows Diverging Views

Market experts appear divided on Home Depot's prospects. On Friday, Stifel downgraded the company from "Buy" to "Hold," citing expectations that the entire home improvement industry will "at best stagnate, if not contract." The firm specifically anticipates disappointing same-store sales figures for the third quarter.

Should investors sell immediately? Or is it worth buying Home Depot?

However, not all analysts share this pessimistic outlook. Bank of America maintains its "Buy" rating with a $450 price target, while J.P. Morgan continues to recommend "Overweight" despite reducing its target from $452 to $444. These conflicting positions highlight the current uncertainty surrounding the company's near-term trajectory.

Key Factors Under Scrutiny:
- Three-day declining trend closing at $362.36
- Stifel's rating reduction from "Buy" to "Hold"
- Quarterly results scheduled for Tuesday before market opening
- Projected earnings per share: $3.82
- Expected revenue: $41.07 billion

Critical Earnings Release Looms

Tuesday's earnings announcement now represents a pivotal moment for Home Depot. The central question remains whether the company will surpass the anticipated $3.82 per share profit or validate Stifel's gloomy forecast. Current analyst consensus, reflected in the Zacks Rank #3 ("Hold") and an average price target of $429.33 among 23 covering analysts, suggests divided opinions. Market participants now face the crucial decision of whether to interpret the current weakness as a buying opportunity or prepare for further potential declines.