We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Home Depot (HD) Stock has a Robust Upside Story
Read MoreHide Full Article
The Home Depot Inc. (HD - Free Report) has been displaying a remarkable upside story and is well-positioned for long-term growth, owing to solid demand for home improvement projects, the robust housing market and ongoing investments. The company is gaining from growth in Pro and DIY customer categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.
Driven by these factors, the company has retained a robust surprise trend. It reported sales and earnings beat for the sixth straight quarter in third-quarter fiscal 2021. The top and bottom lines also improved year over year. Net sales were up 9.8%, while earnings per share improved 23.3% year over year. Its overall comps grew 6.1%, with a 5.5% improvement in the United States.
The Zacks Rank #2 (Buy) company has a market capitalization of $425.9 billion. In the past year, HD has rallied 47.8% compared with the industry's growth of 46.9%. It also compares favorably against the Retail-Wholesale sector's decline of 9.7% and the S&P 500's growth of 27.6%.
In the past 30 days, the company's estimates for fiscal 2021 earnings per share have moved up by 5.8%. For fiscal 2021, its earnings estimates are pegged at $15.49 per share, suggesting 28.8% growth from the year-ago period.
Image Source: Zacks Investment Research
Here's Why Home Depot Should Retain the Momentum
Home Depot is witnessing significant benefits from the execution of its "One Home Depot" plan, which focuses on expanding the supply chain, technology investments and digital enhancements. The company continues to leverage the momentum in strategic investments to enhance the interconnected experience to support its goals of driving growth faster than the market in any environment, strengthening its position as a low-cost provider in home improvement and delivering exceptional shareholder value.
The interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters. Sales, leveraging the digital platforms, rose 8% in the fiscal third quarter. On a two-year stack basis, sales from digital platforms increased nearly 95%. Around 55% of the online orders were delivered from a store.
Other key components of delivering an interconnected experience are enhanced delivery and fulfillment options. Over the years, the company has created the fastest, most efficient delivery network in home improvement through options like buy online pickup in store with convenient pickup lockers, buy online deliver from store with express car and van delivery, and the curbside pickup. The company is looking to enhance interconnected facilities in tool rental through the expansion of rent online pilot chainwide. The capability is likely to enhance the experience for both Pro and DIY customers.
Home Depot's Pro segment has been a key growth driver, with the Pro segment witnessing robust sales growth for the past several quarters. Pro sales growth outpaced DIY sales in the fiscal third quarter. Growth in the Pro segment reflects significant demand for larger projects in the home improvement industry. In the quarter, the company witnessed strength in several Pro-heavy categories like drywall, pipe and fittings, and several millwork categories. The company expects continued sales growth from Pros as project demand is strong and their backlogs are growing.
The company remains on track with its strategic investments to build a Pro ecosystem, including professional-grade products, exclusive brands, enhanced delivery, credit, digital capabilities, field sales support, HD rental and more. The company expects its differentiated Pro ecosystem to aid deeper engagement with Pro customers in the long term.
Other Stocks to Watch
We have highlighted some other top-ranked stocks from the broader Retail-Wholesale space, namely Builders FirstSource (BLDR - Free Report) , Tecnoglass (TGLS - Free Report) and Lowe's Companies (LOW - Free Report) .
Builders FirstSource currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 71.5%, on average. Shares of BLDR have surged 95.9% in the past year.
The Zacks Consensus Estimate for Builders FirstSource's current financial-year sales suggests growth of 129.1% and that for earnings per share reflects growth of 207.6% from the year-ago period's reported figure.
Tecnoglass, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 34.5%, on average. The TGLS stock has gained 255.2% in a year.
The Zacks Consensus Estimate for Tecnoglass' current financial-year earnings per share suggests growth of 84.8% from the year-ago period's reported numbers. TGLS has an expected long-term earnings growth rate of 20%.
Lowe's currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of the company have gained 55.2% in the past year.
The Zacks Consensus Estimate for Lowe's current financial-year earnings per share suggests growth of 34.4% from the year-ago period. LOW has an expected long-term earnings growth rate of 14.8%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Home Depot (HD) Stock has a Robust Upside Story
The Home Depot Inc. (HD - Free Report) has been displaying a remarkable upside story and is well-positioned for long-term growth, owing to solid demand for home improvement projects, the robust housing market and ongoing investments. The company is gaining from growth in Pro and DIY customer categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales.
Driven by these factors, the company has retained a robust surprise trend. It reported sales and earnings beat for the sixth straight quarter in third-quarter fiscal 2021. The top and bottom lines also improved year over year. Net sales were up 9.8%, while earnings per share improved 23.3% year over year. Its overall comps grew 6.1%, with a 5.5% improvement in the United States.
The Zacks Rank #2 (Buy) company has a market capitalization of $425.9 billion. In the past year, HD has rallied 47.8% compared with the industry's growth of 46.9%. It also compares favorably against the Retail-Wholesale sector's decline of 9.7% and the S&P 500's growth of 27.6%.
In the past 30 days, the company's estimates for fiscal 2021 earnings per share have moved up by 5.8%. For fiscal 2021, its earnings estimates are pegged at $15.49 per share, suggesting 28.8% growth from the year-ago period.
Here's Why Home Depot Should Retain the Momentum
Home Depot is witnessing significant benefits from the execution of its "One Home Depot" plan, which focuses on expanding the supply chain, technology investments and digital enhancements. The company continues to leverage the momentum in strategic investments to enhance the interconnected experience to support its goals of driving growth faster than the market in any environment, strengthening its position as a low-cost provider in home improvement and delivering exceptional shareholder value.
The interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters. Sales, leveraging the digital platforms, rose 8% in the fiscal third quarter. On a two-year stack basis, sales from digital platforms increased nearly 95%. Around 55% of the online orders were delivered from a store.
Other key components of delivering an interconnected experience are enhanced delivery and fulfillment options. Over the years, the company has created the fastest, most efficient delivery network in home improvement through options like buy online pickup in store with convenient pickup lockers, buy online deliver from store with express car and van delivery, and the curbside pickup. The company is looking to enhance interconnected facilities in tool rental through the expansion of rent online pilot chainwide. The capability is likely to enhance the experience for both Pro and DIY customers.
Home Depot's Pro segment has been a key growth driver, with the Pro segment witnessing robust sales growth for the past several quarters. Pro sales growth outpaced DIY sales in the fiscal third quarter. Growth in the Pro segment reflects significant demand for larger projects in the home improvement industry. In the quarter, the company witnessed strength in several Pro-heavy categories like drywall, pipe and fittings, and several millwork categories. The company expects continued sales growth from Pros as project demand is strong and their backlogs are growing.
The company remains on track with its strategic investments to build a Pro ecosystem, including professional-grade products, exclusive brands, enhanced delivery, credit, digital capabilities, field sales support, HD rental and more. The company expects its differentiated Pro ecosystem to aid deeper engagement with Pro customers in the long term.
Other Stocks to Watch
We have highlighted some other top-ranked stocks from the broader Retail-Wholesale space, namely Builders FirstSource (BLDR - Free Report) , Tecnoglass (TGLS - Free Report) and Lowe's Companies (LOW - Free Report) .
Builders FirstSource currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 71.5%, on average. Shares of BLDR have surged 95.9% in the past year.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Builders FirstSource's current financial-year sales suggests growth of 129.1% and that for earnings per share reflects growth of 207.6% from the year-ago period's reported figure.
Tecnoglass, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 34.5%, on average. The TGLS stock has gained 255.2% in a year.
The Zacks Consensus Estimate for Tecnoglass' current financial-year earnings per share suggests growth of 84.8% from the year-ago period's reported numbers. TGLS has an expected long-term earnings growth rate of 20%.
Lowe's currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of the company have gained 55.2% in the past year.
The Zacks Consensus Estimate for Lowe's current financial-year earnings per share suggests growth of 34.4% from the year-ago period. LOW has an expected long-term earnings growth rate of 14.8%.