Back to top

Image: Bigstock

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

Read MoreHide Full Article

Home Depot (HD - Free Report) closed at $289.85 in the latest trading session, marking a +0.1% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.2%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the home-improvement retailer had gained 0.01% in the past month. In that same time, the Retail-Wholesale sector lost 3.44%, while the S&P 500 lost 3.29%.

Investors will be hoping for strength from Home Depot as it approaches its next earnings release. The company is expected to report EPS of $4.11, up 4.85% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $37.9 billion, up 2.93% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $16.64 per share and revenue of $156.53 billion, which would represent changes of +7.15% and +3.56%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Home Depot. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.47% higher within the past month. Home Depot currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Home Depot is holding a Forward P/E ratio of 17.4. This valuation marks a premium compared to its industry's average Forward P/E of 8.9.

Investors should also note that HD has a PEG ratio of 1.55 right now. 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 1.55 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 97, which puts it in the top 39% 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.


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