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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 $322.71, moving +1.09% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.33%.

Coming into today, shares of the home-improvement retailer had gained 5.43% in the past month. In that same time, the Retail-Wholesale sector gained 1.01%, while the S&P 500 gained 2.89%.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. This is expected to be August 17, 2021. In that report, analysts expect HD to post earnings of $4.33 per share. This would mark year-over-year growth of 7.71%. Our most recent consensus estimate is calling for quarterly revenue of $40.05 billion, up 5.24% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14 per share and revenue of $143.15 billion. These totals would mark changes of +16.38% and +8.35%, respectively, from last year.

Investors might also notice 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.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.75% higher within the past month. HD currently has a Zacks Rank of #2 (Buy).

Investors should also note HD's current valuation metrics, including its Forward P/E ratio of 22.8. This represents a premium compared to its industry's average Forward P/E of 14.63.

We can also see that HD currently has a PEG ratio of 1.99. 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. The Building Products - Retail industry currently had an average PEG ratio of 1.3 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 22, which puts it in the top 9% 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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