Home Depot (HD) Gains But Lags Market: What You Should Know
Home Depot (HD) closed at $298.91 in the latest trading session, marking a +0.24% move from the prior day. This move lagged the S&P 500's daily gain of 2.62%. Elsewhere, the Dow gained 1.37%, while the tech-heavy Nasdaq added 0.05%.
Prior to today's trading, shares of the home-improvement retailer had gained 10.38% over the past month. This has outpaced the Retail-Wholesale sector's loss of 1.49% and the S&P 500's gain of 0.24% in that time.
Home Depot will be looking to display strength as it nears its next earnings release, which is expected to be August 16, 2022. The company is expected to report EPS of $4.94, up 9.05% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $43.32 billion, up 5.36% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $16.39 per share and revenue of $155.56 billion, which would represent changes of +5.54% and +2.91%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Home Depot. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.47% lower. Home Depot currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Home Depot is holding a Forward P/E ratio of 18.19. Its industry sports an average Forward P/E of 9.12, so we one might conclude that Home Depot is trading at a premium comparatively.
Also, we should mention that HD has a PEG ratio of 1.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Retail was holding an average PEG ratio of 1.95 at yesterday's closing price.
The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 155, which puts it in the bottom 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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