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Home Depot (HD) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Home Depot (HD - Free Report) closed at $290.24 in the latest trading session, marking a -1.93% move from the prior day. This move lagged the S&P 500's daily loss of 1.34%. At the same time, the Dow lost 0.98%, and the tech-heavy Nasdaq lost 1.62%.

Coming into today, shares of the home-improvement retailer had lost 5.93% in the past month. In that same time, the Retail-Wholesale sector lost 4.5%, while the S&P 500 lost 1.57%.

Investors will be eagerly watching for the performance of Home Depot in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on November 14, 2023. On that day, Home Depot is projected to report earnings of $3.80 per share, which would represent a year-over-year decline of 10.38%. Our most recent consensus estimate is calling for quarterly revenue of $37.71 billion, down 3% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $15.24 per share and revenue of $153 billion, which would represent changes of -8.69% and -2.8%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Home Depot. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.04% lower. Home Depot is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Home Depot is presently being traded at a Forward P/E ratio of 19.42. This signifies a premium in comparison to the average Forward P/E of 10.83 for its industry.

We can additionally observe that HD currently boasts a PEG ratio of 2.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Retail industry currently had an average PEG ratio of 1.85 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 82, placing it within the top 33% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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