The Home Depot, Inc. (HD) stock is seeing a surge in short-dated out-of-the-money calls, indicating bullish sentiment. Trading at $359.64, it has rebounded from a recent low of $332.38. Over 5,400 call option contracts have been traded for a $367.50 strike price expiring on Dec. 5, 2025.

Despite lower free cash flow (FCF) margins, Home Depot reported a 2.8% sales increase in Q3 2025. FCF remains strong at 8.2% of sales for the nine months. Analysts project a 4.5% sales increase for 2026, suggesting a potential stock price rise to $375.25 or higher due to undervaluation.

Investors are optimistic about Home Depot’s future, with analysts forecasting a potential price target of $401.89 per share. The stock is considered undervalued, leading to increased call options trading and bullish sentiment among investors.

Read more at Barchart: Heavy Volume in Home Depot Call Options