BofA Names Home Depot Top Pick in Home Improvement, Sets $374 Price Target

Bank of America (BofA) announced on May 5, 2026, that it has reinstated coverage of Home Depot (NYSE:HD) with a "Buy" rating and a price target of $374 per share, designating the home improvement giant as its "Top Pick" in the sector.

Rating Change

BofA had no prior rating on Home Depot before this date, making this an initiation of coverage. The new rating is "Buy" with a $374 price target, representing approximately 15% upside from the previous closing price.

Analyst Rationale

BofA analysts believe Home Depot will outperform its home improvement peers in comparable sales growth, driven by several factors:

• Increased Pro Customer Penetration: The company is attracting more professional contractors and builders, a segment with higher margins.
• Improved Traffic Trends: Stores are seeing higher foot traffic, boosting sales.
• Brand Strength: Home Depot enjoys a strong market reputation and high customer loyalty.

Context

The rating comes amid strong performance for Home Depot stock over the past year, with shares up 12% year-to-date in 2026. Meanwhile, other analysts hold mixed views: some prefer Lowe's (NYSE:LOW) due to its lower valuation, while others see Home Depot as better positioned to benefit from a housing market recovery.

Conclusion

BofA's recommendation reflects confidence in Home Depot's strategy to target professional customers, a fast-growing segment. However, investors should monitor housing market trends and interest rates, as they directly impact demand for home improvement.