The world's pioneer home improvement retailer,
The Home Depot Inc.
), surged to a new high of $82.47 on Dec 31, 2013. It eventually
closed at $82.34, amassing a return of 32.4% over the past 1
Home Depot is a leading player in the highly-fragmented home
improvement industry, where it has been revamping itself by
concentrating on square footage growth and increasing
productivity from its existing store base. By implementing
customer-friendly changes in its store operations, it expects to
boost its top line.
Further, with home prices at affordable levels and cheap mortgage
rates, the housing market recovered significantly in the U.S. in
2013, which in turn favored the company's performance. This is
likely to continue as the housing market is expected to maintain
its pace of growth in 2014.
Investors are also optimistic about this Zacks Rank #3 (Hold)
stock performance, given its positive earnings surprise in the
trailing four quarters averaging about 5.6%. In the last
concluded quarter, the earnings of 95 cents a share surpassed the
Zacks Consensus Estimate by 6.7%and rose 28.4% year over year.
Home Depot reported net sales of $19,470 million that rose 7.4%
on a year-over-year basis, primarily driven by increased
comparable store sales.
Furthermore, the company which competes with
Lowe's Companies Inc.
) follows a disciplined capital allocation strategy, which
focuses on making investments to develop its business, while
using the excess cash to enhance shareholder returns through
dividend payouts and share buybacks. The company intends to
repurchase an additional $2.1 billion of its common stock during
the fourth quarter of fiscal 2013.
Home Depot currently trades at a forward P/E of 22.0x, a 6.8%
discount to the peer group average of 23.6x. The last traded
price is 3.4% below the Zacks Consensus average analyst price
target of $85.25. Average volume of shares traded over the last 3
months stands at approximately 6,736.2K.
Apart from Home Depot, other stocks such as
Brown Shoe Co. Inc.
Foot Locker, Inc.
) achieved new 52-week highs of $28.70 and $41.63, respectively,
on Dec 31, 2013.
BROWN SHOE CO (BWS): Free Stock Analysis
FOOT LOCKER INC (FL): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
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