Bill & Melinda Gates Foundation Trust discloses a new $353 million position in Home Depot as the retailer faces declining sales and margins.
The Bill & Melinda Gates Foundation Trust reported a $353 million stake in Home Depot (HD) during the second quarter, despite a 15% decline in the stock over the past year. High mortgage rates and inflation have reduced new home construction and renovation projects, pressuring HD’s revenue and profitability.
Home Depot expects flat to 2% comparable-sales growth for fiscal 2026, down from 0.3% in 2025. Adjusted operating margins are projected to shrink to 12.4%-12.6% in 2026, compared with 13.1% the prior year. The stock trades at 23 times forward earnings, about 50% above the sector median.
Valuation gaps persist between HD and rival Lowe’s (LOW), which trades at 17.5 times forward earnings. Analysts note HD’s stronger position in the professional contractor market justifies its premium multiples.