This holiday shopping season, Home Depot is looking to regain momentum after a disappointing year. The home improvement retailer’s Black Friday promotion, which ends Wednesday, is aimed at boosting foot traffic following a weak third quarter in which rival Lowe’s outperformed in same-store sales. Both companies were cautious in their forward guidance. “I admit I work at Home Depot for a charitable trust, but the truth is I wish I was at Lowe’s,” Jim Cramer said on CNBC last week, shortly after Lowe’s stock price soared after the company’s earnings. But Jim said Home Depot is the best place to get a lower interest rate for the Trust, a portfolio used by CNBC Investment Club. Mizuho analyst David Bellinger said Home Depot has “enough gift sets and holiday decorations to keep the lights on.” “It’s not make-or-break, but having these other categories definitely helps.” While the spring planting season, which coincides with the busiest time for home sales, is the most important time for Home Depot, Bellinger said Black Friday and holiday shopping remain important. To be sure, neither Home Depot nor Lowe’s stocks are setting the world on fire in the S&P 500’s 2025 boom. Home Depot has fallen more than 8% since the beginning of the year. Lowe’s is down more than 1% in 2025. The charts of both stocks followed similar patterns. But over the past month, Home Depot’s stock has fallen more than Lowe’s. HD LOW YTD Mountain Home Depot and Lowe’s YTD As shoppers gear up for post-Thanksgiving shopping, Home Depot is ready to cash in. The company does not release Black Friday sales data, but William Bastek, Home Depot’s executive vice president of merchandising, said on a recent earnings call that the company is “looking forward to the excitement” of the annual shopping holiday, citing appliance sales from popular brands such as LG, Samsung, Bosch, Whirlpool, GE and Frigidaire. Bastek also highlighted the company’s gift center events. Returning to its 2024 fourth-quarter earnings call in February, Bastek said consumer electronics and gift center events posted record sales, and holiday events drew strong engagement. Home Depot’s sales for the fourth quarter of 2024 were $39.7 billion. Analysts expect sales to decline 4% to $38.09 billion in the fourth quarter of 2025, according to FactSet. A big part of the company’s strategy is to promote the attraction of specialized contractors. The company recently spent more than $22 billion in separate transactions to acquire both SRS Distribution and GMS. In early September, Home Depot completed its acquisition of GMS and integrated it into SRS. So far, the big bet has paid off. Management said SRS, which serves roofing professionals and has a favorable trade credit system, “continues to perform very well.” However, the roofing market is under pressure, and SRS’ third quarter results were flat. Housing construction has also stalled. But unlike DIY customers, which depend on residential turnover, professional customers represent a more stable customer base for Home Depot. Home Depot is about 55% professional and 45% DIY. Lowe’s, known for its DIY offerings, has also strengthened its competitive edge in the professional sector, completing its acquisition of Foundation Building Materials last month. FBM sells building materials and construction materials. Bellinger acknowledged that investors appear to be losing some patience with both stocks, but they still have value. “I feel like[Home Depot and Lowe’s]are nearing their bottoms,” Bellinger said, maintaining buy ratings on both stocks. For Home Depot in particular, the company lowered its price target from $450 to $400. Home Depot has wiped out nearly all of the bull market that began in mid-June as expectations for the Federal Reserve’s interest rate cuts grew. Investors were hoping this year would be different, and the rate cut actually pushed down 10-year Treasury yields and mortgage rates as expected. So far, that hasn’t happened in any meaningful way. The home improvement industry is tied to housing, which has been stalled since last year’s Federal Reserve interest rate cuts failed to stem rising bond yields and mortgage rates. Even though the Fed cut interest rates in September and October, bond yields and mortgage rates haven’t fallen much. According to the CME FedWatch tool, there is a market probability of more than 80% for another rate cut at next month’s central bank policymakers meeting. The bottom line is that Home Depot is a great stock to own if mortgage rates eventually fall. In fact, we took advantage of the post-earnings stock price drop to increase our position in Home Depot last week. “Home Depot didn’t do what I wanted,” Jim said. “But given the fact that interest rates are coming, stock prices are too low.” (Jim Cramer’s Charitable Trust is Long HD. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. 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