Should you buy Home Depot stock despite weak guidance?

Shares of Home Depot Inc (NYSE: HD) are down nearly 4.0% on Tuesday even though the home improvement retailer reported better-than-expected earnings for its fiscal first quarter.

Home Depot stock down on a hit to revenue

The stock is also taking a hit this morning because the quarterly revenue came in well below Street estimates. Still, on CNBC’s “Squawk Box”, Oppenheimer’s Brian Nagel said:

Other notable figures in the earnings release include customer transactions that were down 4.8% versus the previous year while average ticket per transaction edged up 0.2% only.

Home Depot stock is down more than 15% versus its year-to-date high at writing.

Is Home Depot stock worth buying?

Also a negative was the guidance that Home Depot slashed today that suggests softening consumer demand.

The multinational now expects up to a 13% hit to its per-share earnings this year on a 2.0% to 5.0% decline in sales – its first year-on-year decline in those metrics since fiscal 2009. According to the Oppenheimer analyst:

Nagel currently has a price target of $400 on the Home Depot stock that signals a whopping 40% upside from here.