Back to top

Image: Bigstock

Home Depot (HD) Ascends While Market Falls: Some Facts to Note

Read MoreHide Full Article

Home Depot (HD - Free Report) ended the recent trading session at $408.95, demonstrating a +0.92% swing from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily loss of 0.93%. At the same time, the Dow lost 0.41%, and the tech-heavy Nasdaq lost 1.53%.

The home-improvement retailer's shares have seen an increase of 9.96% over the last month, surpassing the Retail-Wholesale sector's gain of 5.61% and the S&P 500's gain of 2.17%.

Market participants will be closely following the financial results of Home Depot in its upcoming release. The company's upcoming EPS is projected at $3.64, signifying a 4.46% drop compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $39.23 billion, up 4.04% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15 per share and a revenue of $157.47 billion, indicating changes of -0.73% and +3.14%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Home Depot. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Right now, Home Depot possesses a Zacks Rank of #3 (Hold).

Investors should also note Home Depot's current valuation metrics, including its Forward P/E ratio of 27.01. Its industry sports an average Forward P/E of 19.62, so one might conclude that Home Depot is trading at a premium comparatively.

It's also important to note that HD currently trades at a PEG ratio of 2.81. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Building Products - Retail industry had an average PEG ratio of 3.36 as trading concluded yesterday.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 181, finds itself in the bottom 29% echelons 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Home Depot, Inc. (HD) - free report >>

Published in