Home Depot (HD) Gains But Lags Market: What You Should Know
Home Depot (HD) closed the most recent trading day at $266.18, moving +0.26% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.72%. Elsewhere, the Dow gained 0.89%, while the tech-heavy Nasdaq added 1.47%.
Heading into today, shares of the home-improvement retailer had gained 6.84% over the past month, lagging the Retail-Wholesale sector's gain of 10.77% and outpacing the S&P 500's gain of 5.85% in that time.
HD will be looking to display strength as it nears its next earnings release, which is expected to be August 18, 2020. In that report, analysts expect HD to post earnings of $2.24 per share. This would mark a year-over-year decline of 29.34%. Meanwhile, our latest consensus estimate is calling for revenue of $33.17 billion, up 7.57% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.09 per share and revenue of $115.86 billion. These totals would mark changes of -1.56% and +5.11%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for HD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.79% higher. HD currently has a Zacks Rank of #2 (Buy).
Digging into valuation, HD currently has a Forward P/E ratio of 26.32. This valuation marks a premium compared to its industry's average Forward P/E of 19.69.
We can also see that HD currently has a PEG ratio of 2.31. 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 2.31 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 21, putting it in the top 9% 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.