Home Depot Faces Uncertain 2025: Dips 2.20% in Premarket Home Depot (NYSE: NYSE:HD ) has set a cautious tone for 2025, forecasting a decline in annual profit and lower-than-expected same-store sales growth. The home improvement giant is grappling with weakened demand for big-ticket renovations as high borrowing costs and economic uncertainty weigh on consumer spending. Despite a strong holiday quarter, the company’s outlook has spooked investors, leading to a 2.20% drop in premarket trading on Tuesday.
Headwinds for Home Depot
Home Depot’s recent earnings report highlights shifting consumer behavior. While discount-driven promotions boosted holiday sales, the broader trend reflects a pullback in large-scale remodeling projects. Customers are opting for smaller repair and maintenance activities instead of major renovations due to persistent inflation and high financing costs.
The company expects fiscal 2025 adjusted earnings-per-share to decline by about 2%, starkly contrasting analysts' projection of a 4.6% growth. Annual comparable sales growth is forecasted at 1%, below the 1.7% analyst estimate. This weak outlook is further compounded by ongoing inflationary pressures and a volatile macroeconomic environment, with tariffs and federal spending cuts adding to consumer hesitancy.
Despite these concerns, Home Depot reported a surprise rise in same-store sales of 0.8% in Q4, breaking an eight-quarter losing streak. Customer transactions jumped 7.6%, suggesting continued engagement, albeit at a lower spending level. However, customer visits declined by 3% during the quarter, signaling potential weakness ahead.
Technical Analysis
From a technical standpoint, NYSE:HD is struggling to hold support levels. The stock was already oversold at Monday’s close, with a Relative Strength Index (RSI) of 32, indicating selling pressure. Tuesday’s 2.20% premarket dip has pushed the stock below its one-month low support level, raising concerns about further downside.
If bearish momentum persists, the next significant support level could be around $370. A break below this range may trigger additional selling pressure, leading to deeper corrections. On the upside, any recovery would need to push past resistance levels formed at the recent highs to signal a potential reversal.
Conclusion
Home Depot’s weaker-than-expected 2025 forecast underscores the broader economic slowdown and shifts in consumer spending habits. While the company saw a holiday sales boost, macroeconomic headwinds, inflation, and high borrowing costs continue to dampen demand for major home improvement projects.
From a technical perspective, the stock is at a critical juncture. With oversold conditions and broken support levels, investors should monitor the $370 range closely. Any further weakness could lead to a prolonged downtrend, while a recovery above key resistance levels would indicate renewed bullish sentiment.
As Home Depot navigates an uncertain economic landscape, the coming months will be crucial in determining whether it can stabilize and reclaim investor confidence.
