Stifel has upgraded Home Depot (NYSE: HD) from Hold to Buy with a revised price target of \$425. This decision follows the company’s fiscal Q1 2025 earnings beat, which highlighted a rebound in customer spending on home improvement projects. Despite management maintaining a cautious tone for the rest of the year, the stronger-than-expected top-line results suggest a shift in consumer sentiment that could support future growth.
The quarter’s revenue upside was driven by increased traffic and average ticket size, signaling that while large-scale remodeling projects remain subdued due to high interest rates, smaller discretionary purchases are making a comeback. This positive momentum was enough to prompt analysts to reevaluate the stock’s near-term potential.
Home Depot’s dividend remains a key pillar for long-term investors. The company recently raised its quarterly dividend to \$2.30 per share, or \$9.20 annually, offering a yield of approximately 2.48%. With a payout ratio around 62.5% and 152 consecutive quarters of dividend payments, Home Depot continues to demonstrate a strong commitment to shareholder returns. The dividend has grown at an average annual rate of over 10% in the past five years, reinforcing its status as a reliable income generator.
Despite ongoing macroeconomic pressures, the combination of resilient sales, disciplined capital allocation, and shareholder-friendly policies makes Home Depot an attractive name for both growth and income-oriented investors. Stifel’s upgrade underscores renewed confidence in the retailer’s ability to navigate uncertainty and capitalize on improving demand trends.