Home Depot drops on Q3 miss, 358–320 support now in play
$Home Depot(HD)$
334.50 Dollar Cliff-Dive: Q3 Earnings Miss Triggers 358-320 Support Test》
Latest Close:
HD closed at $334.50 (-0.59%), marking a sharp decline from yesterday's close of $336.48
The stock remains approximately 23.4% below its 52-week high of $439.37, signaling continued weakness in the retail home improvement sector.
Core Market Drivers:
Home Depot's Q3 earnings disappointed with adjusted EPS of $3.74 versus $3.84 expected; same-store sales growth of just 0.2% fell short of 1.36% estimates.
Management cited weakened consumer confidence and housing market pressures, while the absence of storm activity compared to last year's weather-driven demand significantly impacted roofing and generator categories.
Technical Indicator Analysis:
Trading volume surged to 7.6 million shares (2.93x average), indicating heavy selling pressure.
The dramatic 6% decline breaks below key support levels, with RSI likely oversold.
The sharp gap-down suggests momentum has shifted decidedly bearish in the near term.
Valuation Analysis:
HD's current P/E ratio of 22.87x remains elevated compared to the S&P 500's 20-25x range, though more reasonable than many growth stocks.
The forward P/E of 23.89x suggests limited valuation cushion during earnings disappointments.
Analyst Price Targets:
Wall Street maintains an average target of $421.42, with 8 strong buys, 17 buys, 13 holds, and 1 sell rating.
However, recent downgrades from Stifel (cut to Hold, target reduced to $370) reflect growing caution.
Weekly Outlook:
Expect continued volatility within the $320-$368 range. Key support lies at $320-$326 (near 52-week lows), while resistance emerges at $358-$368 (prior support turned resistance).
A break below $320 could trigger further downside toward $300, while recovery above $358 would signal potential stabilization.
Key Price Levels:
Critical Support: $320-$326 — 52-week low zone, decisive break risks accelerated selling
Primary Resistance: $350-$356 — Yesterday's support now becomes overhead supply
Recovery Target: $380-$385 — Required for trend stabilization
Risk Disclaimer:
This analysis is for informational purposes only and does not constitute investment advice. Stock performance remains subject to housing market conditions, consumer spending trends, and broader economic factors. Please invest cautiously.
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