Home Depot (HD) Gains But Lags Market: What You Should Know

Home Depot (HD) closed the most recent trading day at $274.30, moving +0.41% from the previous trading session. The stock lagged the S&P 500’s daily gain of 1.39%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.97%.

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Prior to today’s trading, shares of the home-improvement retailer had gained 1.17% over the past month. This has outpaced the Retail-Wholesale sector’s loss of 0.97% and lagged the S&P 500’s gain of 2.58% in that time.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. The company is expected to report EPS of $2.57, up 12.72% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $30 billion, up 16.38% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.76 per share and revenue of $129.56 billion. These totals would mark changes of +14.73% and +17.54%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for HD. These revisions help to show the ever-changing nature of near-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection remained stagnant. HD currently has a Zacks Rank of #3 (Hold).

Investors should also note HD’s current valuation metrics, including its Forward P/E ratio of 23.44. This represents a premium compared to its industry’s average Forward P/E of 16.02.

Meanwhile, HD’s PEG ratio is currently 2.14. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. HD’s industry had an average PEG ratio of 1.19 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 44, which puts it in the top 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.

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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