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Home Depot (HD) Stock Declines While Market Improves: Some Information for Investors

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In the latest trading session, Home Depot (HD - Free Report) closed at $347.37, marking a -0.91% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.74%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq added 1.68%.

Heading into today, shares of the home-improvement retailer had lost 7.5% over the past month, lagging the Retail-Wholesale sector's gain of 1.06% and the S&P 500's gain of 0.8% in that time.

Market participants will be closely following the financial results of Home Depot in its upcoming release. The company plans to announce its earnings on May 14, 2024. In that report, analysts expect Home Depot to post earnings of $3.61 per share. This would mark a year-over-year decline of 5.5%. Meanwhile, the latest consensus estimate predicts the revenue to be $36.69 billion, indicating a 1.53% decrease compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.37 per share and a revenue of $154.56 billion, indicating changes of +1.72% and +1.24%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Home Depot. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.1% decrease. Currently, Home Depot is carrying a Zacks Rank of #3 (Hold).

Looking at valuation, Home Depot is presently trading at a Forward P/E ratio of 22.8. This represents a premium compared to its industry's average Forward P/E of 15.96.

Investors should also note that HD has a PEG ratio of 2.33 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Building Products - Retail industry had an average PEG ratio of 1.75 as trading concluded yesterday.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 30% 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.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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