Q4 Earnings Scorecard and Analyst Reports for Home Depot, BHP & McDonald’s

Tuesday, January 19, 2021

The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features an update on the ongoing Q4 earnings season and new research reports on 16 major stocks, including Home Depot (HD), BHP Group (BHP) and McDonald’s (MCD). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Q4 Earnings Season Scorecard

We are off to a very good start in the Q4 earnings season, with an above average proportion of companies beating consensus estimates and the outlook for the coming periods steadily improving. Total earnings or aggregate net income for the 33 S&P 500 companies that have reported Q4 results already are up +8.5{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} from the same period last year on +1.3{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} higher revenues, with a very high 97{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} beating EPS estimates and 75.8{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} beating revenue estimates.

This is a notably better performance relative to what we saw from the same group of 33 index members in the first three quarters of 2020.

For the Finance sector, which has been dominating the early reporting cycle, total Q4

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Home Depot Won in the Pandemic. One Analyst Now Says It’s a Buy.

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Home Depot could begin buying back stock this year, the analyst says.

Al Bello/Getty Images

Home Depot

stock is getting a lift following an upgrade from Guggenheim, which says the home improvement retailer’s profits will rise thanks to recent investments.

Analyst Steven Forbes raised his rating on Home Depot (ticker: HD) to Buy from Neutral, and established a $310 price target for the stock. The move comes on the heels of the company’s acquisition of HD Supply, its recent $3 billion debt offering, and a more moderate valuation, which stands in contrast to the stock’s historical premium, he said.

Forbes originally moved to the sidelines with Home Depot in September of 2019, concerned that the company’s investment plans would weigh on profit margins. While management is still spending, he forecasts strategic investment will fall year over year in the second half of 2021, giving a lift to margins. The “2022 margin implications could be even greater as the weight of up to $900 million of incremental investment spend begins to roll off.” he wrote.

That leaves him confident that the company can return to a more normalized EBIT margin next year, leading to mid- and eventually high-single digit

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