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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 $208.80, moving +1.88% from the previous trading session. This change outpaced the S&P 500's 1.3% gain on the day. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.39%.

Prior to today's trading, shares of the home-improvement retailer had lost 3.74% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 6.28% and the S&P 500's loss of 4.84% 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 August 20, 2019. The company is expected to report EPS of $3.09, up 1.31% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $31.01 billion, up 1.79% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.17 per share and revenue of $111.35 billion, which would represent changes of +2.83% and +2.91%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for HD. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.67% higher. HD is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note HD's current valuation metrics, including its Forward P/E ratio of 20.16. For comparison, its industry has an average Forward P/E of 12.95, which means HD is trading at a premium to the group.

We can also see that HD currently has a PEG ratio of 1.88. 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. The Building Products - Retail industry currently had an average PEG ratio of 1.29 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 18% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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