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Buy Home Depot (HD) Stock Ahead of Q1 Earnings for Coronavirus Safety?

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Home Depot (HD - Free Report) is set to report its first quarter fiscal 2020 financial results before the market opens on Tuesday, May 19. The home improvement power’s stores have remained open as an essential retailer, with new coronavirus-focused safety measures in place. This might make it attractive as investors continue to look for companies able to grow during the coronavirus.

Home Depot stock has soared over 42% since the market’s March 23 lows, to crush the S&P 500’s 25%. Meanwhile, rival Lowe’s (LOW - Free Report) shares have surged over 60%. Clearly, Wall Street seems happy to climb into retailers with coronavirus immunity, which includes Walmart (WMT - Free Report) , Target (TGT - Free Report) , and of course Amazon (AMZN - Free Report) .

 

 

 

 

 

 

 

Moving on, our Zacks estimates call for Home Depot’s Q1 revenue to jump 3.5%. This would crush Q4’s 2.7% decline and come on top of the year-ago period’s nearly 6% sales expansion. Meanwhile, its Q1 comps are expected to pop 3.7%.

On the bottom end of the income statement, Home Depot’s adjusted first quarter earnings are projected to dip -0.88% to $2.25 share. Investors should also note that its consensus earnings estimate has climbed by $0.01 in the last week, but remains below where it stood 60 days ago.

Bottom Line

Home Depot is currently a Zacks Rank #3 (Hold) that sports an “A” grade for Growth and a “B” for Momentum in our Style Scores system. Plus, HD shares sit around 6% below their 52-week highs and its 2.60% dividend yield tops Lowe’s 2.02% and the S&P 500’s 2.05%.

Longer-term investors might want to consider buying Home Depot, but HD could slip in the near-term on possible pandemic setbacks. And even if it does provide strong guidance or outperform, it could fall if investors take home some profits, with HD shares up over 42% in under two months.

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