Famed investor Jim Cramer says Home Depot (NYSE: HD) can make you an “awful lot of money” as the company posts a better-than-expected Q4 and reaffirms guidance for 2026.
The home improvement retailer earned $2.72 a share in its fourth quarter on $38.20 billion in revenue, handily beating $2.54 per share and $38.12 billion consensus.
HD sees its total sales pushing 3.5% higher this year, while EPS is seen gaining another 2% versus 2025.
Following the post earnings surge, Home Depot stock is up some 12% year-to-date.
Why is Jim Cramer bullish on Home Depot stock?
While Cramer has long been a proponent of HD stock, his renewed optimism is mostly attributed to mortgage rates that recently dipped below 6% for the first time since 2022.
This means the “big spur” for Home Depot is finally here, he said on CNBC today.
The NYSE-listed firm made a “real big bet” on the “Pro” business during a period where building activity was stagnant – and lower rates could unlock the true potential of that investment this year, according to the former hedge fund manager.
All in all, Cramer remains convinced that as rates go down, “you’re going to make an awful lot of money with Home Depot”.
On Tuesday, the Mad Money host also praised HD’s better-than-expected margin, saying it proves the retailer is strongly positioned to withstand tariff uncertainty and intense competition.
Cramer still favors Lowe’s over HD shares
Despite a market-beating Q4 and reaffirmed outlook, Jim Cramer did not “abandon” his preference for the company’s chief rival.
On “Squawk on the Street”, the renowned market commentator agreed that Marvin Ellison and the team at Lowe’s (NYSE: LOW) have simply “done a better job” in recent years.
While HD chases the professional contractor, Cramer highlights that Lowe’s has an “outstanding” business-to-consumer model that has proven more robust on the charts.
“If you put a chart up of Lowe’s, you’re going to see that Lowe’s is the one that works,” he noted.
With Lowe’s set to report tomorrow, he expects an even “better quarter” from the firm, suggesting that while Home Depot shares are good, Lowe’s remains the superior execution play.
Should you buy Home Depot stock on Q4 earnings?
Beyond the headline beat, Home Depot’s fourth-quarter release offered plenty for income-seeking investors to cheer about, most notably a 1.3% increase in quarterly dividend to $2.33 a share.
This marks the company’s 37th consecutive year of dividend payments, reinforcing management’s confidence in its long-term cash flow.
However, even with the “post-earnings surge” and the bullishness surrounding falling mortgage rates, Cramer is preaching patience for those not already invested in HD shares.
He recommends against chasing the post-earning strength. While the fundamentals are undeniably strong, investors should wait for a pullback before initiating a new position in Home Depot Inc, he concluded.
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