Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Home Depot (HD - Free Report) closed at $314.43, marking a +0.63% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.42%.

Prior to today's trading, shares of the home-improvement retailer had gained 18.42% over the past month. This has outpaced the Retail-Wholesale sector's gain of 2.7% and the S&P 500's gain of 6.32% in that time.

HD will be looking to display strength as it nears its next earnings release, which 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.57 per share and revenue of $134.83 billion, which would represent changes of +4.49% and +2.06%, respectively, from the prior year.

Any recent changes to analyst estimates for HD should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% higher. HD is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, HD currently has a Forward P/E ratio of 24.97. Its industry sports an average Forward P/E of 17.02, so we one might conclude that HD is trading at a premium comparatively.

We can also see that HD currently has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.59 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


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


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

Published in