Home Depot shares slide in 2026, but Melius keeps a high price target at $397

Home Depot’s stock has fallen roughly 17% so far in 2026, according to market-tracker figures cited in a recent Yahoo Finance post, even as at least one Wall Street firm continues to project substantial gains from current levels. The article said Home Depot (ticker HD) is trading around $285, putting the shares lower year to date as investors weigh the outlook for the home-improvement retailer.

The Yahoo Finance report highlighted a new Buy rating from Melius and attached a specific price target of $397. In the same write-up, it also referenced a different “street” target of about $378, framing the Melius view as more optimistic than the broader consensus estimate.

The post further quantified the implication of that target. Using the quoted price near $285, it described potential upside to the $397 level and estimated a potential total return of about 54%. It also cited an annualized internal rate of return of roughly 10% per year, a metric that is intended to summarize the expected pace of returns over time rather than a single-period gain.

What the article did not provide in the information available for this review was the detailed reasoning behind Melius’s $397 figure. The write-up points to the existence of an analyst thesis and comparative targets, but it does not lay out, in the material provided here, the specific drivers such as earnings expectations, store traffic, project demand, margins, or capital allocation priorities that typically underpin a target price change.

In general terms, analyst target updates for retailers like Home Depot tend to track expectations for same-store sales and the trajectory of operating margins, along with views on housing-related activity (such as repair and remodel demand versus new construction). The Yahoo Finance post indicates that Melius sees those components differently than the market, but the particular elements of that view are not enumerated in the excerpted content available for this story.

Broader context matters because Home Depot operates in a competitive retail environment where pricing and promotions can influence results, and where changes in interest rates can affect consumer borrowing costs and contractor activity. Those macro-linked variables are common inputs to rating changes, but the Yahoo Finance item as provided here does not specify which of them are most responsible for Melius’s stance.

For investors and analysts, the key takeaway from the report is the spread between current trading levels and multiple target estimates, with Melius’s $397 target positioned above the street figure near $378. Still, without more detailed disclosures in the available article text, it is not possible to verify which assumptions drive the higher target or whether any near-term catalysts are tied to earnings, guidance, or sector conditions.

Going forward, market watchers typically look to subsequent earnings reports and company guidance updates for confirmation of demand trends and margin durability. Whether Home Depot can close the gap between today’s trading price and analyst targets may ultimately hinge on how management frames the pace of improvement across categories and whether industry conditions align with the expectations embedded in these price targets.