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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 most recent trading day at $319.99, moving -1.2% from the previous trading session. This change lagged the S&P 500's daily gain of 0.18%.

Coming into today, shares of the home-improvement retailer had gained 8.99% in the past month. In that same time, the Retail-Wholesale sector gained 0.73%, while the S&P 500 gained 6.99%.

HD will be looking to display strength as it nears its next earnings release, which is expected to be May 18, 2021. The company is expected to report EPS of $2.87, up 37.98% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $33.61 billion, up 18.93% from the year-ago period.

HD's full-year Zacks Consensus Estimates are calling for earnings of $12.67 per share and revenue of $135.66 billion. These results would represent year-over-year changes of +5.32% and +2.69%, respectively.

It is also important to note the recent changes to analyst estimates for HD. These recent revisions tend to reflect the evolving nature of short-term business trends. 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 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 0.6% higher. HD is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, HD is currently trading at a Forward P/E ratio of 25.56. Its industry sports an average Forward P/E of 17.78, 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 2.37. 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 1.57 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 96, which puts it in the top 38% 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.

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


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