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Home Depot (HD) Gains As Market Dips: What You Should Know

Home Depot (HD) closed at $173.20 in the latest trading session, marking a +0.56% move from the prior day. This move outpaced the S&P 500's daily loss of 0.66%. At the same time, the Dow lost 0.99%, and the tech-heavy Nasdaq lost 1.63%.

Prior to today's trading, shares of the home-improvement retailer had lost 16.73% over the past month. This has lagged the Retail-Wholesale sector's loss of 12.76% and the S&P 500's loss of 8.1% in that time.

Investors will be hoping for strength from HD as it approaches its next earnings release, which is expected to be November 13, 2018. In that report, analysts expect HD to post earnings of $2.28 per share. This would mark year-over-year growth of 23.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $26.28 billion, up 5.02% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.57 per share and revenue of $108.26 billion, which would represent changes of +28.28% and +7.29%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for HD. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. HD is currently a Zacks Rank #3 (Hold).

Looking at its valuation, HD is holding a Forward P/E ratio of 17.99. This valuation marks a premium compared to its industry's average Forward P/E of 12.67.

Investors should also note that HD has a PEG ratio of 1.36 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HD's industry had an average PEG ratio of 1.25 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 202, putting it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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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