HD

Cotality's chief economist Selma Hepp warns the 30-year fixed mortgage rates could spike to 9% if inflation reaccelerates and growing fiscal deficit drive long-term US Treasury yields up further. While not her base case, Hepp emphasized in a recent CNBC interview that such an “extreme” rate environment will severely paralyze housing activity, deepening the affordability crisis and freezing existing inventory as homebuyer demand collapses.

Home Depot (HD) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.

The Dividend Harvesting Portfolio was streamlined from over 110 to 84 positions, focusing on higher-conviction holdings and income growth. Portfolio cleanup and reinvestment boosted forward annualized dividend income by $95.91 (2.95%) to $3,347.22, with a portfolio yield of 8.22%. Exited 15 positions, reallocating $2,926.58 into names like HD, MCD, PEP, AVGO, and ORCL, increasing projected annual income by $67.64.

Home Depot's stock sits near a 52-week low and housing turnover has been frozen for four years, yet the company keeps writing dividend checks. Whether that streak survives depends on three numbers investors should watch closely.

Home Depot is moderately undervalued, trading at 19.5x EPS guidance with a 3.19% yield, despite a 28.7% stock decline over the past year. HD's Pro strategy, delivery speed, and AI investments are driving share gains and compounding earnings even in a frozen housing market. Q2 results showed 5.7% revenue growth, 5.1% adjusted EPS growth, and 33.9% FCF growth, with debt repayment prioritized over buybacks.

Home Depot and Floor & Decor lean on distinct fundamentals, from Pro exposure and digital growth to store expansion and category specialization.

HD's Pro growth, SRS expansion and cross-selling are supporting sales, but weak housing turnover and muted big-ticket demand continue to limit upside.

Home Depot's pullback has lowered its valuation, but soft traffic, housing weakness and margin pressure temper support from Pro and digital growth.

Home Depot's Pro strength, SRS expansion and digital gains are boosting growth, but weak traffic and housing pressures continue to constrain big projects.

HD's Pro investments are gaining traction in complex purchases, with better delivery tools, broader catalogs and positive Pro comps.