Home Depot Inc. (HD) reports third-quarter earnings Tuesday before the bell, and the results could tell us a lot about how the housing market's ongoing funk is hitting America's home improvement appetite. The big question: Are high mortgage rates and sluggish home sales finally easing up, or are they still putting a damper on DIY dreams?

The Numbers Wall Street Wants to See

Analysts are looking for third-quarter revenue of $41.14 billion, which would be up from $40.22 billion in last year's third quarter, according to data from Benzinga Pro. That sounds encouraging, but Home Depot's recent track record is a bit shaky. The company has beaten revenue estimates in six of the last 10 quarters overall, but it missed in the most recent second quarter.

On the earnings front, analysts expect $3.85 per share, up from $3.78 in the year-ago period. Here's where things get interesting: Home Depot has now missed earnings-per-share estimates for two straight quarters after beating them in eight of the previous 10 quarters. That's a pattern investors will want to see reverse.

What the Experts Think

Bank of America Securities analyst Robert F. Ohmes is projecting comparable sales growth of 1.3%, pointing to strong trends in August but a softer October. He's maintaining his Buy rating and $450 price target, highlighting the company's Pro segment expansion through the September acquisition of Gypsum Management & Supply, which adds more products and offerings for professional contractors.

But Ohmes also flagged the same concerns everyone's watching: high mortgage rates and weak home sales turnover. When people aren't buying and selling homes, they're not doing major renovations.

Freedom Capital Markets Chief Market Strategist Jay Woods echoed these worries, calling out the slow housing market and "stubbornly high mortgage rates" as factors holding the stock back. But he offered some perspective on what to expect from the earnings event itself.

"While the stock has been volatile all year, earnings have not been a major event from a price action viewpoint," Woods noted in a weekly newsletter. "Shares have rallied after 4 of the last 8 results with an average move of +/- 2.4%."

Woods said investors will get a deeper look at how housing trends are actually impacting the retailer's business. "Watch for comps growth, average ticket size, and whether large-scale projects are back or still delayed," he advised. He also flagged margin commentary and any updates to full-year guidance as critical details.

Recent analyst ratings show a mixed picture. Stifel downgraded the stock from Buy to Hold and slashed its price target from $440 to $370. Meanwhile, Telsey maintained an Outperform rating with a $455 price target. Wells Fargo kept its Overweight rating but lowered its target from $450 to $435, and JPMorgan maintained Overweight while trimming its target from $452 to $444.

The Visit Data Looks Better

A recent report from Placer.ai offers some encouraging news. Home Depot saw an improvement in store visits during the third quarter compared to earlier in the year. After posting year-over-year visit declines of 1.9%, 1.2%, and 3.8% in April, May, and June respectively, the retailer saw third-quarter visits down just 0.4% year-over-year.

Breaking it down by month, visits were down 0.9% in July, up 1.2% in August, and down 1.4% in September. October visits were down 0.6% year-over-year. The narrowing gap suggests the pullback in large home improvement projects in late 2024 and early 2025 might be stabilizing.

For context, rival Lowe's Companies (LOW) saw visits decline just 0.1% year-over-year in the third quarter. Placer.ai also noted that the Gen Z demographic could be driving future home improvement demand, and Home Depot may already be targeting this segment with new creator programs for the next generation of DIYers.

What Management Said Last Time

Home Depot CEO Ted Decker said after the second quarter that the retailer had momentum, citing a rise in smaller home improvement projects. Investors will want to hear similar optimism about the third quarter and momentum continuing through the end of the fiscal year.

The company reiterated its full-year sales outlook of 2.8% year-over-year growth and a 1.0% comparable sales growth rate. Whether that guidance gets updated will be a key focus.

The Lowe's Connection and Broader Market Impact

Home Depot reports Tuesday, one day before rival Lowe's (LOW) delivers its own results Wednesday. The two retailers have similar financial trajectories, with their shares down nearly the same amount in 2025. Lowe's has beaten analyst estimates for earnings per share in 10 straight quarters and beaten revenue estimates in six of the last 10 quarters—nearly identical to Home Depot's record, though slightly better on the earnings side.

The earnings could also move the broader market. Home Depot is the fourth largest holding in the SPDR Dow Jones Industrial Average ETF (DIA), which tracks the Dow Jones Industrial Average, with 4.73% of assets. Thanks to the index's price-weighted structure, Home Depot is one of its largest components.

The Stock Today

Home Depot (HD) stock was down 1.19% to $358.03 on Monday, trading in a 52-week range of $326.31 to $439.37. The stock is down 7.8% year-to-date in 2025.