The Best and Worst Dow Stocks for the Next 12 Months

11. The Home Depot Inc. (NYSE:HD)

Upside Potential: 23.5%

Market Cap: $354 billion

Number of Hedge Fund Holders: 88

The Home Depot Inc. (NYSE:HD) is the world’s largest home improvement retailer with around 2,300 stores across North America. It offers a wide selection of building materials, appliances, tools, and home improvement products.

Home Depot Inc. (NYSE:HD) released its Q4 2024 results on February 22, reporting 14.1% year-over-year growth in quarterly revenue of $39.7 billion. However, comparable basis sales rose 0.8%, exceeding street expectations. Notably, this was the first positive growth reported after eight quarters of decline. For the full year, comparable sales declined 1.8%, and adjusted EPS stood at $15.24, flat year-over-year.

However, the company’s guidance for FY 2025 was softer-than-expected. It guided for total sales growth of 2.8% and comparable sales growth of around 1%, which was lower than the consensus of around 1.65%. Kate McShane, analyst at Goldman Sachs, called the guidance conservative considering the muted housing environment amid persistently higher mortgage rates.

While the housing market softness persists, the company is well-positioned to benefit from a rebound in housing activity and big-ticket projects. On March 11, Morgan Stanley analyst Simeon Gutman reiterated his Buy rating on the stock with a price target of $450. The analyst believes that the company’s expansion of its Pro customer segment through new capabilities and systems should strongly support revenue growth. As per him, the enhanced supply chain and faster delivery times should improve customer engagement and position the company well for the next housing market cycle.