Home Depot and Lowe’s Earnings Preview: Stock Market Volatility Ahead for Retail Investors

Home Depot and Lowe’s are set to report earnings this week, with traders anticipating sizable swings in the home improvement retailers’ stocks. Options pricing suggests Home Depot could move up to 4% in either direction by the end of the week, while Lowe’s could swing as much as 5%. These expectations highlight the heightened volatility surrounding retail earnings, especially as investors look for signals on consumer spending and housing market resilience.

Home Depot will release results Tuesday morning, followed by Lowe’s on Wednesday. For Home Depot, a 4% move could push shares above $398 its highest level since last September or drag them down to $366. Lowe’s, meanwhile, could set a record high above $294 at the upper end or fall to $266 at the lower bound. These ranges reflect the uncertainty traders are pricing in as they prepare for earnings-driven volatility.

Both stocks have enjoyed a strong start to 2026, with Home Depot up about 11% and Lowe’s gaining 16%. This rally comes amid a broader rotation out of tech stocks and into consumer-focused companies, as investors seek exposure to sectors tied more directly to household demand and construction activity. The upcoming earnings reports will test whether this rotation can sustain momentum.

Ultimately, Home Depot and Lowe’s earnings this week are more than just company updates they are key indicators of consumer health and retail sector strength. Traders should prepare for potential volatility, as the results could influence not only the companies themselves but also broader retail and consumer discretionary indexes.

Results from Home Depot and Lowe’s this week could provide valuable insights into the health of the American consumer and the housing market. In recent quarters, both retailers have noted that many Americans are holding back on large do-it-yourself projects, reflecting cautious spending behavior. This trend has pushed the companies to rely more heavily on professional contractors as a growth driver, signaling a shift in demand within the home improvement sector.

For investors, these earnings reports are more than just company updates they serve as indicators of broader economic resilience. Consumer spending patterns, particularly in housing-related projects, often mirror confidence levels in the economy. If professional contractor demand continues to offset weaker DIY activity, it could suggest underlying strength in construction and housing markets despite inflationary pressures.

The results also carry implications for retail-focused ETFs and indexes. Strong earnings could reinforce the recent rotation into consumer-focused companies, while weaker numbers may reignite concerns about slowing demand. Traders are watching closely, as volatility in Home Depot and Lowe’s shares could ripple across the broader retail sector.

Ultimately, the earnings announcements will help investors gauge whether consumer caution is temporary or part of a longer-term trend. For those with exposure to retail and housing-linked stocks, the reports will be pivotal in shaping near-term strategy and confidence in the sector.

UBS analysts recently noted they will be closely watching executive commentary on the outlook for the home improvement market. They highlighted tax refunds, declining mortgage rates, and the Trump administration’s housing affordability proposals as potential tailwinds for the sector this year. These factors could provide a boost to consumer demand, making the upcoming earnings reports particularly significant for investors tracking retail and housing-linked stocks.

Home Depot is expected to report adjusted earnings per share of $2.53, with revenue projected to fall 4% year-over-year to $38.15 billion for the fourth quarter. The decline reflects ongoing consumer caution in large-scale DIY projects, though professional contractor demand may help offset weakness. Investors will be watching closely to see if Home Depot can maintain momentum despite revenue pressure.

Meanwhile, Lowe’s is projected to post adjusted EPS of $1.93 on a 10% jump in revenue to $20.37 billion. This growth suggests Lowe’s may be benefiting from stronger consumer engagement and contractor partnerships, positioning it as a potential outperformer in the sector. The contrast between Home Depot’s expected revenue decline and Lowe’s projected growth underscores the competitive dynamics shaping the home improvement market.

For investors, these earnings will provide critical insights into consumer health, housing market resilience, and the broader retail sector’s trajectory. Strong results could reinforce confidence in consumer-focused stocks, while weaker numbers may reignite concerns about slowing demand. Traders should prepare for volatility, as both Home Depot and Lowe’s are expected to see sizable stock swings following their reports.

Analysts tracked by Visible Alpha remain largely bullish on both Home Depot and Lowe’s, with a majority recommending buying the shares. The consensus price target for Home Depot sits at $418, suggesting about 9% upside from current levels. This optimism reflects confidence in the company’s ability to navigate consumer spending shifts and maintain growth despite near-term revenue pressures.

For Lowe’s, the mean price target is $289, implying roughly a 3% rise from Friday’s close. While the upside is more modest compared to Home Depot, analysts see Lowe’s benefiting from strong revenue growth and contractor demand, positioning it as a steady performer in the home improvement sector.

These forecasts highlight the broader investor sentiment that both companies remain attractive plays in consumer-focused retail, particularly as the housing market shows signs of resilience. With earnings reports due this week, traders are watching closely to see if results align with bullish expectations.

Ultimately, the analyst outlook underscores confidence in the sector’s long-term trajectory. For investors, the price targets provide a benchmark for potential gains, while earnings results will serve as the immediate catalyst for stock movement.

The bottom line for investors is clear: Home Depot and Lowe’s earnings this week will serve as a critical gauge of consumer health and housing market resilience. Traders are bracing for sizable swings in both stocks, with options pricing signaling volatility. Strong results could reinforce the recent rotation into consumer-focused companies, while weaker numbers may reignite concerns about slowing demand.

Home Depot is expected to post adjusted EPS of $2.53 on a 4% revenue decline, while Lowe’s is projected to deliver adjusted EPS of $1.93 on a 10% revenue jump. Analysts remain largely bullish, with consensus price targets suggesting upside potential for both stocks 9% for Home Depot and 3% for Lowe’s. These forecasts highlight confidence in the sector’s long-term trajectory despite near-term uncertainty.

For investors, the key takeaway is that these earnings reports are not just company updates they are pivotal signals for broader market sentiment. Consumer spending trends, housing affordability proposals, and contractor demand will all play a role in shaping the outlook.

Ultimately, Home Depot and Lowe’s results this week will determine whether the retail sector can sustain momentum in 2026. Investors should prepare for volatility and use the earnings as a benchmark for positioning in consumer-focused stocks.