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Home Depot (HD) Suffers a Larger Drop Than the General Market: Key Insights

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The most recent trading session ended with Home Depot (HD - Free Report) standing at $331.97, reflecting a -0.67% shift from the previouse trading day's closing. This move lagged the S&P 500's daily loss of 0.34%. Meanwhile, the Dow gained 0.23%, and the Nasdaq, a tech-heavy index, lost 0.33%.

Shares of the home-improvement retailer witnessed a loss of 7.93% over the previous month, trailing the performance of the Retail-Wholesale sector with its loss of 4.37% and the S&P 500's loss of 4.05%.

Analysts and investors alike will be keeping a close eye on the performance of Home Depot in its upcoming earnings disclosure. The company's earnings report is set to go public on May 14, 2024. The company is expected to report EPS of $2.78, down 27.23% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $36.69 billion, reflecting a 1.53% fall from the equivalent quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $15.37 per share and a revenue of $154.56 billion, representing changes of +1.72% and +1.24%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Home Depot. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.04% fall in the Zacks Consensus EPS estimate. Right now, Home Depot possesses a Zacks Rank of #4 (Sell).

In the context of valuation, Home Depot is at present trading with a Forward P/E ratio of 21.74. For comparison, its industry has an average Forward P/E of 14.71, which means Home Depot is trading at a premium to the group.

We can additionally observe that HD currently boasts a PEG ratio of 2.23. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. HD's industry had an average PEG ratio of 1.96 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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