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Earnings Growth & Price Strength Make Home Depot (HD) a Stock to Watch

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Breaking Down the Zacks Focus List

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Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Brokerage analysts are in charge of determining a company's growth and profitability expectations, or earnings estimates. These analysts work together with company management to evaluate all factors that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Investors also need to look at what a company will earn down the road. This is why earnings estimate revisions are so important.

When a stock receives upward earnings estimate revisions, it will likely get even more positive changes in the future. For instance, if an analyst raised their earnings outlook last month, they'll probably do so again this month, and other analysts will follow.

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The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.

Focus List Spotlight: Home Depot (HD)

Based on net sales, The Home Depot Inc. is the world’s largest home improvement specialty retailer with 2,298 retail stores across the globe as of the end of second-quarter fiscal 2021. It offers a diverse range of branded and proprietary home improvement items, building materials, lawn and garden products, décor products and related services.

HD, a #3 (Hold) stock, was added to the Focus List on October 15, 2015 at $120.27 per share. Since then, shares have increased 176.98% to $333.12.

11 analysts revised their earnings estimate higher in the last 60 days for fiscal 2022, while the Zacks Consensus Estimate has increased $0.46 to $14.46. HD also boasts an average earnings surprise of 9.2%.

Additionally, HD's earnings are expected to grow 20.2% for the current fiscal year.

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The Home Depot, Inc. (HD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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