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

Zacks Equity Research

Home Depot (HD) closed at $208.33 in the latest trading session, marking a +0.66% move from the prior day. This move lagged the S&P 500's daily gain of 1.5%. Elsewhere, the Dow gained 1.48%, while the tech-heavy Nasdaq added 1.95%.

Heading into today, shares of the home-improvement retailer had lost 5.36% over the past month, outpacing the Retail-Wholesale sector's loss of 6.26% and lagging the S&P 500's loss of 4.19% in that time.

HD will be looking to display strength as it nears its next earnings release, which is expected to be August 20, 2019. In that report, analysts expect HD to post earnings of $3.09 per share. This would mark year-over-year growth of 1.31%. Our most recent consensus estimate is calling for quarterly revenue of $31.01 billion, up 1.79% from the year-ago period.

HD's full-year Zacks Consensus Estimates are calling for earnings of $10.10 per share and revenue of $111.35 billion. These results would represent year-over-year changes of +2.12% and +2.91%, respectively.

Investors might also notice recent changes to analyst estimates for HD. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 0.56% lower. HD currently has a Zacks Rank of #3 (Hold).

Digging into valuation, HD currently has a Forward P/E ratio of 20.49. Its industry sports an average Forward P/E of 13.51, so we one might conclude that HD is trading at a premium comparatively.

Meanwhile, HD's PEG ratio is currently 1.91. 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. The Building Products - Retail industry currently 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 172, putting it in the bottom 33% 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.

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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