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Home Depot (HD) Stock Sinks As Market Gains: What You Should Know

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Home Depot (HD - Free Report) closed the latest trading day at $340.69, indicating a -0.47% change from the previous session's end. The stock's performance was behind the S&P 500's daily gain of 0.13%. Elsewhere, the Dow gained 0.08%, while the tech-heavy Nasdaq lost 0.1%.

The home-improvement retailer's shares have seen a decrease of 5.46% over the last month, not keeping up with the Retail-Wholesale sector's gain of 0.98% and the S&P 500's loss of 0.35%.

The upcoming earnings release of Home Depot will be of great interest to investors. The company's earnings report is expected on May 14, 2024. In that report, analysts expect Home Depot to post earnings of $3.61 per share. This would mark a year-over-year decline of 5.5%. Meanwhile, the latest consensus estimate predicts the revenue to be $36.69 billion, indicating a 1.53% decrease compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $15.37 per share and revenue of $154.56 billion, indicating changes of +1.72% and +1.24%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Home Depot. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Home Depot is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, Home Depot currently has a Forward P/E ratio of 22.26. This signifies a premium in comparison to the average Forward P/E of 15.1 for its industry.

One should further note that HD currently holds a PEG ratio of 2.28. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Building Products - Retail industry had an average PEG ratio of 2.

The Building Products - Retail industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 190, placing it within the bottom 25% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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