So here's a classic Wall Street head-scratcher: Home Depot Inc. (HD) reports a quarter that looks pretty good on paper—earnings beat, margins better than expected—and the stock decides to take a nosedive anyway. Shares tanked more than 2.5% on Wednesday, closing around $374.48. The market, it seems, was less than thrilled.

But while investors were selling, the analysts who get paid to think about this stuff were busy doing the opposite: raising their price targets and reaffirming bullish ratings. It's one of those moments where the stock price and the professional opinion seem to be telling two different stories.

Let's run through the analyst scorecard. Steven Forbes at Guggenheim Securities reaffirmed a Buy and bumped his target from $400 to $425. Over at DA Davidson, Michael Baker also kept his Buy and got even more optimistic, lifting his target from $407 to $445. Joseph Feldman at Telsey Advisory Group maintained an Outperform rating and raised his target from $410 to $435. And Robert Ohmes at BofA Securities stuck with a Buy and a $430 price target. That's a pretty unified front of optimism in the face of a down day.

Why the confidence? Forbes at Guggenheim pointed out that the operating results "broadly exceed our estimates," with comparable sales coming in about 60 basis points better than expected and adjusted EBITDA roughly 3.5% higher. He's particularly excited about what Home Depot is building for its professional customers—the so-called PRO ecosystem. We're talking order management and digital project planning tools, a trade credit platform, job site delivery with real-time tracking for bulky orders, various AI-enabled tools, and an external sales force. Forbes thinks as these initiatives mature, they'll "widen the company's industry out-performance gap—fostering meaningful share capture" by 2026 and beyond. In other words, they're building a moat.

Baker at DA Davidson acknowledges the macro headwinds—it's not a secret that the housing and home improvement markets have been under pressure. But he sees signs that things might be getting less bad, "suggesting we may be inching closer to the recovery." He notes that the midpoint of Home Depot's own guidance suggests about 1% comparable sales growth for 2026. That number "would be the best in three years," he wrote. Combine that with the market share gains he expects from those pro initiatives, and he sees "more upside than downside to HD's 2026 outlook."

Feldman at Telsey highlighted the earnings beat: $2.72 per share versus a consensus of $2.53. Profitability was a bright spot too, with operating margins of 10.5% beating the expected 10.3%. He noted that "underlying demand was stable through 4Q25" but was dented by a lack of storm-related repair work and general consumer uncertainty. Management, for its part, reiterated its full-year 2026 guidance, which Feldman sees as reflecting "a stable home improvement market with ongoing housing pressure."

Ohmes at BofA dug into the customer traffic. Transactions were down 1.6% in the quarter, but the damage was offset by a 2.4% rise in the average ticket size. That came from "some price increases, trade-up for new product, and greater mix of higher ticket items." Perhaps more encouraging was the trend through the quarter: comparable sales improved from a 0.2% decline in November to a 1.3% growth in January. He also confirmed the company reaffirmed its preliminary 2026 outlook for comparable sales to be flat to up 2%, with the second half expected to be slightly better than the first due to easier comparisons (read: no storms to boost sales this year). The margin outlook of 12.8% to 13% reflects a slight expected dip in gross margin to 33.1%.

So, to sum it up: The stock sold off on the day. But the people whose job it is to analyze the fundamentals saw a company executing well, investing in future growth drivers, and guiding toward a recovery in a key metric. Sometimes the market reacts to the headline; sometimes it pays to listen to the people reading the fine print.