Boosted by the recent rebound in the U.S. housing market,
The Home Depot Inc
) hit a new 52-week high of $74.28 on Apr 19, before closing at
$74.00. This Zacks Rank #3 (Hold) home improvement retailer beat
its previous 52-week high of $74.19 and generated a year-to-date
return of approximately 17.2%.
Average volume of shares traded over the last 3 months came in
at approximately 7,046K. Currently, the stock trades at a forward
P/E of 20.96x, almost flat with its peer group.
Home Depot is a leading player in the highly fragmented home
improvement industry. The company has been revamping itself by
concentrating on square footage growth and the maximization of
productivity from its existing store base.
In addition, the company has implemented significant changes
in its store operations to make them simpler and more
customer-friendly. We believe that these initiatives will induce
more traffic to its stores while boosting its top line.
Home Depot has always maintained a disciplined capital
allocation strategy, focused on making investments to develop its
business, while using the excess cash to enhance shareholder
returns by paying dividends and share buybacks. Since 1987, the
company has increased its dividend from 0.06 cents to 39 cents.
Additionally, the company targets to grow return on invested
capital to 24% by the close of 2015.
The company also boasts an impressive record of beating the
quarterly earnings expectations and has a favorable outlook.
With respect to earnings surprise, Home Depot has beaten the
Zacks Consensus Estimate 19 times in the last 20 quarters with an
average surprise of 12.2%. In the last reported quarter, i.e. for
the fourth quarter of fiscal 2012, the company's earnings beat
the Zacks Consensus Estimate by 4.7%.
The company's adjusted earnings of 67 cents per share jumped
approximately 34.0% from the year-ago quarter's earnings of 50
cents and beat the Zacks Consensus Estimate of 64 cents. The
increased bottom-line was aided by strong sales growth and
improved operating performance.
Looking ahead, Home Depot projected fiscal 2013 earnings to
increase by nearly 12% to $3.37 per share and total sales to
increase by 2.0% year over year, with comparable store sales
expected to rise nearly 3.0%.
Besides Home Depot, companies such as
The Clorox Company
Campbell Soup Co
) achieved new 52-week highs of $119.89, $90.10 and $46.72,
respectively, on Apr 19.
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HOME DEPOT (HD): Free Stock Analysis Report
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