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Home Depot (HD) Gains But Lags Market: What You Should Know

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·3 min read
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Home Depot (HD) closed the most recent trading day at $339.25, moving +0.49% from the previous trading session. This move lagged the S&P 500's daily gain of 0.74%.

Coming into today, shares of the home-improvement retailer had gained 7.36% in the past month. In that same time, the Retail-Wholesale sector gained 1.29%, while the S&P 500 gained 3.21%.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. This is expected to be May 18, 2021. The company is expected to report EPS of $2.91, up 39.9% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $33.98 billion, up 20.25% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.68 per share and revenue of $135.66 billion. These totals would mark changes of +5.4% and +2.69%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for HD. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Within the past 30 days, our consensus EPS projection has moved 0.88% higher. HD is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, HD is holding a Forward P/E ratio of 26.63. For comparison, its industry has an average Forward P/E of 18.77, which means HD is trading at a premium to the group.

Meanwhile, HD's PEG ratio is currently 2.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HD's industry had an average PEG ratio of 1.61 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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