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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 $238.11, moving +1.32% from the previous trading session. This move outpaced the S&P 500's daily gain of 1.13%. Elsewhere, the Dow gained 1.68%, while the tech-heavy Nasdaq added 0.43%.

Prior to today's trading, shares of the home-improvement retailer had gained 7.54% over the past month. This has outpaced the Retail-Wholesale sector's gain of 2.45% and the S&P 500's gain of 2.1% 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 25, 2020. The company is expected to report EPS of $2.10, down 6.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $25.76 billion, down 2.74% from the prior-year quarter.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% lower. HD is holding a Zacks Rank of #4 (Sell) right now.

In terms of valuation, HD is currently trading at a Forward P/E ratio of 22.41. This valuation marks a premium compared to its industry's average Forward P/E of 13.96.

We can also see that HD currently has a PEG ratio of 1.99. 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. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.26 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 222, putting it in the bottom 13% 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.

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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