Floor & Decor Holdings Inc. (NYSE:FND) anticipates capturing a larger market share in 2026 as housing conditions improve slightly and industry competition eases.
Goldman Sachs Upgrades: Housing Recovery Outlook
Goldman Sachs analysts, led by Kate McShane, upgraded Floor & Decor to Neutral from Sell and set a 12-month price forecast of $71, down from $80 previously.
The upgrade cited expectations for a modestly improved U.S. housing backdrop in 2026, stabilizing comparable sales and margins, and potential market-share gains as competitive pressures ease.
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The bank noted that while housing turnover has not recovered since its January downgrade, the backdrop appears to be holding steady and could strengthen as mortgage rates decline.
Analysts noted that management continues to open stores at a 20-unit pace but sees flexibility to accelerate in 2026 if conditions improve. FND's valuation has compressed nearly 19.9 times since January and now trades at 29.2 times below its five-year average, limiting downside risk.
Still, analysts stopped short of a more constructive view, citing uncertainty following the CEO transition and concerns that newer stores are posting weaker revenue performance due to macroeconomic factors.
Market Share Gains and Financial Projections
While FND's scale, pricing, and broad assortment leave it well positioned as smaller rivals struggle with tariffs and tighter economics, its high correlation to housing turnover justifies a Neutral stance, Goldman noted.
Goldman expects 2026 housing conditions to improve modestly, with mortgage rates projected to ease toward 6.15%.
A recovery in home-price appreciation and a 5-7% increase in housing turnover could support a rebound in FND's comps, given the report's view that FND's comparable sales are highly correlated to housing turnover.
The firm noted that rising HELOC (Home Equity Line of Credit) issuance and home-equity borrowing may also support demand for smaller-scope projects, an area where FND could benefit as transmission improves.
The bank forecasts an improvement in same-store sales in 2026, supported by potential consolidation and growth in adjacent categories and commercial business.
The company posted a 1.2% comp decline in the third quarter of 2025, with transactions down -3.0% and average ticket up 1.8%, as management pointed to pressure on discretionary spending from elevated mortgage rates and strained housing affordability.
For 2025, management guided to $4.66-$4.71 billion in sales, up 5%-6% year over year, and expects comparable store sales of -2% to -1% versus -7.1% in 2024.
Goldman sees market-share opportunities from bankruptcies and store closures at LL Flooring and The Tile Shop, where overlapping trade areas could drive incremental revenue. Competitive pricing analysis shows FND maintains prices below industry averages across most comparable products.
New-store performance remains pressured, with average revenue at $11 million versus long-term targets, though the firm expects improvement as macro conditions normalize and stores shift back toward larger markets.
Margin Resilience and EPS Estimates
Margins remain resilient, supported by disciplined pricing, supply-chain savings, and higher-margin design services. 2025 gross margin guidance stands at 43.6%-43.7%. Cost-control actions are driving operating leverage, with 2025/2026 operating margins seen at 5.6%/5.9%.
Goldman estimates EPS of $1.87, $2.08, and $2.59 for 2025, 2026, and 2027. On the top line, the firm forecasts revenue of $4.68 billion for 2025, $5.08 billion for 2026, and $5.68 billion for 2027.
The firm's 12-month price forecast of $71 implies roughly 11% upside, compared with an average of 15% across the rest of its coverage as of November 11.
Price Action: FND shares were trading lower by 2.01% to $61.88 at last check Thursday.
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