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

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In the latest trading session, Home Depot (HD - Free Report) closed at $174.21, marking a +1.16% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.54%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.95%.

Heading into today, shares of the home-improvement retailer had lost 3.79% over the past month, outpacing the Retail-Wholesale sector's loss of 5% and the S&P 500's loss of 4.97% in that time.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. This is expected to be February 19, 2019. The company is expected to report EPS of $2.17, up 28.4% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $26.60 billion, up 11.37% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.77 per share and revenue of $108.26 billion, which would represent changes of +30.97% and +7.29%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for HD. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.35% higher. HD is currently a Zacks Rank #3 (Hold).

Investors should also note HD's current valuation metrics, including its Forward P/E ratio of 17.62. This valuation marks a premium compared to its industry's average Forward P/E of 11.6.

We can also see that HD currently has a PEG ratio of 1.35. 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 1.09 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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