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

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Home Depot (HD - Free Report) closed at $276.33 in the latest trading session, marking a +1.88% move from the prior day. This change outpaced the S&P 500's 0.04% gain on the day. Meanwhile, the Dow gained 0.19%, and the Nasdaq, a tech-heavy index, added 0.28%.

Prior to today's trading, shares of the home-improvement retailer had gained 2.13% over the past month. This has outpaced the Retail-Wholesale sector's loss of 0.75% and lagged the S&P 500's gain of 3.84% in that time.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. In that report, analysts expect HD to post earnings of $2.57 per share. This would mark year-over-year growth of 12.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30 billion, up 16.38% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.76 per share and revenue of $129.56 billion. These totals would mark changes of +14.73% and +17.54%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for HD. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. HD is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, HD is holding a Forward P/E ratio of 23.07. This valuation marks a premium compared to its industry's average Forward P/E of 14.96.

Meanwhile, HD's PEG ratio is currently 2.11. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.15 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the 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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