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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 $177.02, moving +1.96% from the previous trading session. This change outpaced the S&P 500's 0.7% gain on the day. At the same time, the Dow added 0.42%, and the tech-heavy Nasdaq gained 1.26%.

Coming into today, shares of the home-improvement retailer had lost 1.33% in the past month. In that same time, the Retail-Wholesale sector lost 5.87%, while the S&P 500 lost 6.13%.

Investors will be hoping for strength from HD as it approaches its next earnings release, which 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 $9.81 per share and revenue of $108.26 billion, which would represent changes of +31.5% and +7.29%, respectively, from the prior year.

Any recent changes to analyst estimates for HD should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. HD is currently a Zacks Rank #2 (Buy).

Investors should also note HD's current valuation metrics, including its Forward P/E ratio of 17.71. This valuation marks a premium compared to its industry's average Forward P/E of 11.07.

Investors should also note that HD has a PEG ratio of 1.37 right now. 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. HD's industry had an average PEG ratio of 1.07 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 222, which puts it in the bottom 13% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.




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