Home Depot Stock Analysis: Is a Bullish Reversal Coming?

With Home Depot set to report earnings on Tuesday, 18 November, investors are watching closely for signs of a potential bullish reversal. The company’s forecasted performance, technical indicators, and long-term fundamentals are all shaping market expectations—raising the question: Is Home Depot undervalued and ready for a rally?

Forecasted Earnings Suggest Possible Upside

Home Depot is expected to report an EPS of $3.81, reflecting a 0.79% increase from last year’s Q3 EPS of $3.78.
This improvement is particularly noteworthy because Home Depot’s share price has fallen 11.02% year-on-year, from $401.96 (2024) to $357.67, potentially signalling that the stock is trading below intrinsic value.

However, this decline may be tied to slowing demand for large-scale home improvement projects, something investors should pay close attention to in the upcoming earnings report.

Technical Analysis: Signs of an Oversold Market

Technical indicators show conditions that could support a bullish move:

1. RSI Indicates Oversold Conditions

Home Depot’s current RSI of 27 places the stock firmly in oversold territory. Historically, such levels often precede upward momentum.

2. Price Touching Lower Bollinger Band

The share price is currently sitting on the lower Bollinger Band, reinforcing the idea that the stock may be undervalued in the short term.

3. MACD Shows Selling Pressure—But Near Support

While the weekly MACD suggests continued selling pressure, this momentum may be limited.
A key support line, aligned with a Fibonacci retracement level just below the current price, provides a strong technical safety net that could fuel a reversal.

Fundamental Strength Supports Long-Term Growth

Despite short-term weakness, Home Depot remains fundamentally strong:

• P/E ratio: 24.32 — approaching fair value
• Forward P/E: 22.10 — improving valuation outlook

Based on current metrics, price targets indicate potential upside:

• High target: $394.47 → +10.29% upside
• Low target: $375.60 → +5.01% upside

Additionally, analysts have issued an average forecast of $440.42, representing a 21.54% upside, further supporting the argument that Home Depot may currently be undervalued.

Outlook for Traders and Investors

Home Depot remains in a short-term bearish trend, so traders may prefer to wait for clear reversal confirmation before entering long positions.
However, if the upcoming earnings report shows stabilising demand—particularly for large home improvement projects—the stock could enter a strong bullish reversal.

With supportive fundamentals, oversold technicals, and improving earnings expectations, Home Depot may be approaching a prime entry point for long-term investors.