Home Depot (HD) Surges 1.76% on GMS Acquisition, Analyst Upgrades, Insider Buys

The Home Depot (HD) shares surged 1.76% on Thursday, marking a three-day winning streak with a cumulative gain of 3.11% over the past three trading days. The stock reached an intraday high of $434.22, its highest level since September 2025, reflecting renewed investor confidence in the home improvement retailer’s strategic direction and market resilience.

Recent momentum follows the completion of Home Depot’s $5.5 billion acquisition of GMS, a major building materials distributor, which strengthens its position in the professional contractor segment. The move, combined with its 2024 acquisition of SRS Distribution, expands product offerings like drywall and steel framing while enhancing fulfillment capabilities. CEO Ted Decker highlighted cross-selling opportunities and streamlined project execution for contractors, positioning the company to address sustained home improvement demand amid shifting market dynamics.

However, macroeconomic challenges persist. High interest rates (30-year mortgages above 6% since 2022) and economic uncertainty have dampened consumer appetite for large projects. CFO Richard McPhail noted a 2.6% decline in same-store foot traffic during Q2 2025, despite a 1.4% rise in U.S. comparable sales. Pro contractors also report deferrals rather than cancellations, underscoring a cautious consumer sentiment. A sluggish housing market, with median home prices rising 0.2% and sales up 2% monthly, further complicates demand forecasting.

Strategic pricing adjustments are being implemented to counter potential tariffs under the Trump administration. While over 50% of Home Depot’s products remain unaffected by tariffs, modest price changes in targeted categories aim to mitigate margin pressures. Merchandising VP Billy Bastick emphasized these adjustments will not be broad-based, balancing competitiveness with affordability for price-sensitive customers.

Analyst optimism and insider confidence bolster the stock’s outlook. Zacks Research upgraded earnings estimates for 2026–2028, while Goldman Sachs analyst Kate McShane reiterated a “Buy” rating with a $444 price target. Insider purchases, including CIO Kevin Simpson’s increased stake, reinforce trust in the company’s long-term trajectory. These factors contributed to a 10% stock rally over three months as of September 2025.

Despite strategic gains, short-term headwinds linger. Zacks analysts trimmed EPS forecasts for 2026–2027, citing inflation, supply chain costs, and competitive pressures. Some contractors also critique Home Depot’s product assortment gaps. Meanwhile, housing market fluctuations, such as a 0.6% spike in unsold homes in July 2025, highlight seasonal slowdowns. Analysts remain cautiously optimistic, emphasizing Home Depot’s ability to navigate economic uncertainty while capitalizing on evolving home improvement demand as conditions stabilize.