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Home Depot (HD) Outpaces Stock Market Gains: What You Should Know

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Home Depot (HD - Free Report) closed the most recent trading day at $200.77, moving +0.76% from the previous trading session. This change outpaced the S&P 500's 0.01% gain on the day. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq added 0.26%.

Heading into today, shares of the home-improvement retailer had gained 1.84% over the past month, lagging the Retail-Wholesale sector's gain of 4.95% and the S&P 500's gain of 3.73% in that time.

Investors will be hoping for strength from HD as it approaches its next earnings release, which is expected to be November 13, 2018. The company is expected to report EPS of $2.28, up 23.91% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $26.26 billion, up 4.92% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.57 per share and revenue of $108.26 billion, which would represent changes of +28.28% and +7.29%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for HD. 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.

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.

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 1.4% higher within the past month. HD currently has a Zacks Rank of #3 (Hold).

In terms of valuation, HD is currently trading at a Forward P/E ratio of 20.81. This valuation marks a premium compared to its industry's average Forward P/E of 14.47.

Meanwhile, HD's PEG ratio is currently 1.57. 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. The Building Products - Retail industry currently had an average PEG ratio of 1.34 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 173, which puts it in the bottom 32% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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