Home Depot Stock Slides: Mortgage Rates and Co-Founder's Death Weigh In

Home Depot Inc. (HD) stock has been on a downward trajectory today, with analysts attributing the decline to a combination of factors. The recent surge in mortgage rates and the passing of co-founder Bernie Marcus have both contributed to the stock's slide.

Mortgage rates have been surging higher following the Trump victory, causing housing stocks to fall. Lennar, D.R. Horton, and PulteGroup were all down on Wednesday, and retailers like Home Depot and Lowe's also experienced lower stock prices. The increase in mortgage rates makes home purchases less affordable, leading to a slowdown in new home sales and renovations. This, in turn, negatively impacts Home Depot's sales and earnings, as consumers are less likely to undertake home improvement projects or purchase new homes.

The death of Home Depot co-founder Bernie Marcus has also contributed to the stock's decline. Marcus, who served as the company's first CEO and chairman, was a significant influence on the company's growth and culture. His passing could have sparked investor uncertainty about the company's future leadership and direction. Additionally, Marcus was a major Republican donor, and his death may have impacted political sentiment, further influencing the stock's performance.

Home Depot's recent earnings report has also played a role in the stock's decline. In 2023, revenue decreased by -3.01% to $152.67 billion, and earnings dropped by -11.47% to $15.14 billion. Despite the company's strong fundamentals, investors were spooked by the financial impact of hurricane-related costs, similar to HCA Healthcare's experience.

Analyst ratings and price targets for Home Depot stock have seen mixed changes in recent weeks. As of November 6, 2024, the average rating from 28 analysts is "Buy," with a 12-month stock price forecast of $414.15, indicating a 7.15% increase from the latest price. However, this is a decrease from the previous forecast of $425.67 on October 29, 2024, suggesting a slight downward revision in expectations. The price target reduction may be attributed to factors such as the recent passing of co-founder Bernie Marcus, potential impacts from ongoing hurricanes, or broader market conditions. Despite the slight revision, the majority of analysts maintain a positive outlook on Home Depot stock.

In conclusion, Home Depot's stock has been sliding today due to a combination of factors, including the recent surge in mortgage rates, the death of co-founder Bernie Marcus, and the company's recent earnings report. While analysts remain largely positive on the stock, investors should stay informed about these developments and monitor the company's progress in the coming months.