Home Depot stock has had a shaky 2026, but the latest earnings report has not really changed the main debate around the company.Wall Street still mostly says the shares are worth buying, although the current valuation makes the upside harder to justify unless the housing market improves more meaningfully.

The Home Depot (NYSE: HD) stock is down about 10% this year, reflecting investor worries about inflation, elevated interest rates and a sluggish housing market. The backdrop matters because Home Depot tends to perform best when homeowners feel confident enough to move, renovate or spend on larger home projects.

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Home Depot's first-quarter fiscal 2026 results on 19 May came in better than expected. Revenue rose nearly 5% year over year to $41.77bn, while adjusted earnings were $3.43 per share, also ahead of forecasts.

Still, it was not exactly a booming quarter. Comparable sales rose just 0.6%, comparable transactions fell 1.3% and gross margin came in below expectations at 33%, according to CNBC.

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The company said demand was broadly similar to what it had seen through fiscal 2025, despite consumer caution and continuing pressure from housing affordability. So while the results were decent, they looked more like a sign of resilience than the beginning of a major growth rebound.

That distinction matters for investors trying to decide whether the recent weakness in the stock has created a buying opportunity or simply exposed a company facing a slower operating environment.

Home Depot also maintained its full-year outlook, and that is one reason the stock has struggled to regain momentum. The company still expects sales growth of 2.5% to 4.5%, comparable sales growth of 0% to 2% and adjusted earnings per share growth of 0% to 4%.

That is not a weak forecast, but it also does not point to the kind of expansion that usually supports a premium valuation. Reuters noted late last year that Home Depot's fiscal 2026 targets were already below what many analysts had expected.

Source: International Business Times UK