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

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Home Depot (HD - Free Report) closed the most recent trading day at $304.82, moving +0.87% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.32%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq lost 0.11%.

Heading into today, shares of the home-improvement retailer had gained 15.51% over the past month, outpacing the Retail-Wholesale sector's gain of 1.64% and the S&P 500's gain of 4.4% in that time.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. This is expected to be May 18, 2021. On that day, HD is projected to report earnings of $2.84 per share, which would represent year-over-year growth of 36.54%. Our most recent consensus estimate is calling for quarterly revenue of $33.38 billion, up 18.12% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.57 per share and revenue of $134.83 billion. These totals would mark changes of +4.49% and +2.06%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for HD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 has moved 0.14% higher. HD is currently a Zacks Rank #3 (Hold).

Looking at its valuation, HD is holding a Forward P/E ratio of 24.05. This represents a premium compared to its industry's average Forward P/E of 15.7.

Also, we should mention that HD has a PEG ratio of 2.31. 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. The Building Products - Retail was holding an average PEG ratio of 1.54 at yesterday's closing price.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow HD in the coming trading sessions, be sure to utilize Zacks.com.


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