HD heads into its May 12 Q1 report with the Street broadly bullish but the stock trading well below consensus targets, raising the question of whether the print can close that gap.
Options positioning has shifted notably more optimistic heading into the release. The put/call ratio has slipped to 0.84 — roughly 1.6 standard deviations below its 20-day average of 0.88 — making it one of the more call-heavy readings of the past year, with the 52-week low at 0.70 and high at 1.07. That skew suggests the options market is leaning toward upside rather than hedging against a miss. It sits alongside a stock that is down about 2% on the week and flat over the past month at $317.45, and off roughly 6% year-to-date. The short-selling signal is almost entirely absent: SI % of FF is just 1.2%, borrow costs are negligible at 0.28%, and availability is extremely loose — there is no meaningful short-seller pressure here.
The bull-bear debate centers not on the company's competitive moat, which analysts broadly accept, but on whether macro headwinds have fully passed. Bulls point to HD's dominant position in home improvement, its deepening penetration of the Pro customer segment, and a consensus 2026 EPS estimate around $15.27. Morgan Stanley (Overweight, $420 target) and Wells Fargo (Overweight, $420) both lifted targets following the February print. UBS went higher still, raising its Buy target to $450. The consensus mean now sits at $406 — nearly 28% above the current price — which is a wide gap that reflects either a genuinely undervalued name or a Street that has not fully marked down its optimism. Bears, including BNP Paribas, are more cautious: the firm trimmed its target from $391 to $348 in late March, keeping a Neutral rating, noting that comp growth is likely to remain subdued. The bear case acknowledges HD's acquisition strategy — Interline Brands, HD Supply, GMS — is expanding its addressable market but at the cost of carrying elevated debt.
The historical earnings picture offers limited drama. The most recent print in late February produced barely a scratch — the stock fell just 0.4% on the day and drifted 2.7% lower over the following five sessions. That muted reaction, combined with today's call-skewed options positioning, points to a market that sees this as a slow-and-steady story rather than a high-volatility event. BlackRock, the largest institutional holder, added roughly 1.5 million shares as recently as April 30, reinforcing the view that long-term holders remain committed at these levels. Insider activity has run in the other direction — the CFO and multiple EVPs sold modest amounts in March — but the sizes are small and significance scores low, consistent with routine plan sales rather than a directional signal.
The print will test whether HD's comp trajectory has genuinely turned positive, and whether margin discipline in a tariff-pressured cost environment is intact enough to justify the Street's still-elevated price targets.
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