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Home Depot (HD) Outpaces Stock Market Gains: What You Should Know

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Zacks Equity Research
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Home Depot (HD) closed the most recent trading day at $274.17, moving +0.74% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.1%. Meanwhile, the Dow gained 0.12%, and the Nasdaq, a tech-heavy index, lost 0.02%.

HD will be looking to display strength as it nears its next earnings release. In that report, analysts expect HD to post earnings of $2.58 per share. This would mark year-over-year growth of 13.16%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $30.31 billion, up 17.56% from the year-ago period.

Any recent changes to analyst estimates for HD should also be noted by investors. Recent revisions tend to reflect the latest 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.56% higher. HD is currently a Zacks Rank #2 (Buy).

In terms of valuation, HD is currently trading at a Forward P/E ratio of 21.93. Its industry sports an average Forward P/E of 15.12, so we one might conclude that HD is trading at a premium comparatively.

We can also see that HD currently has a PEG ratio of 1.97. 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 1.06 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 53, which puts it in the top 21% 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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