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Key Takeaways

• Home Depot and rival Lowe's are scheduled to report quarterly financial results on Tuesday and Wednesday, respectively.

• First-quarter sales are expected to rise at Home Depot and decline at Lowe's, while both are projected to post a decline in profits from a year ago.

• Analysts are largely bullish on both home improvement retailers' stocks, anticipating room for improvement later this year.

Home Depot (HD) and rival Lowe's (LOW) are scheduled to report quarterly financial results on Tuesday and Wednesday, respectively, with analysts largely bullish on both home improvement retailers' stocks.

Of the 13 analysts covering Home Depot tracked by Visible Alpha, 11 have issued "buy" or equivalent ratings, while two have neutral ratings. Meanwhile, 10 out of 15 analysts covering Lowe's call it a "buy," with five "hold" ratings. The mean price targets for both stocks—at $436 for Home Depot and $270 for Lowe's—would suggest roughly 15% upside from Friday's closing levels.

First-quarter sales for Home Depot are expected to rise 8% year-over-year to $39.26 billion, while Lowe's revenue is projected to drop 2% to $20.95 billion. Adjusted earnings per share are expected to decline for both retailers—to $3.56 and $2.87, respectively.

Analysts Expect Slow Start to 2025

Ahead of the reports, analysts from UBS said that while they are not "expecting any real earth-shattering news" from the first-quarter results, they like the stocks for several reasons. The analysts pointed to relatively stable demand despite tariff uncertainty, with room for improvement later this year if the housing market turns around.

Morgan Stanley analysts echoed the comments, and called the retailers "high quality bellwethers." They expect both retailers to hold their previous full-year forecasts steady, but noted that they could introduce broader ranges to reflect the uncertainty, as some other companies have done this earnings season.

JPMorgan analysts recently trimmed their price targets for Home Depot and Lowe's to $410 and $263, respectively, from $470 and $300 previously. They lowered their comparable sales projections for the first quarter as the analysts said they believe tariff-fueled uncertainty "is having an effect on bigger ticket spending," a category Lowe's and Home Depot struggled with last year as squeezed consumers avoided big purchases.

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