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Home Depot (HD) closed at $181.76 in the latest trading session, marking a -1.6% move from the prior day. This move lagged the S&P 500's daily gain of 1.15%. Meanwhile, the Dow gained 2.39%, and the Nasdaq, a tech-heavy index, lost 0.45%.
Prior to today's trading, shares of the home-improvement retailer had lost 22.18% over the past month. This has lagged the Retail-Wholesale sector's loss of 15.08% and was narrower than the S&P 500's loss of 24.07% in that time.
Investors will be hoping for strength from HD as it approaches its next earnings release, which is expected to be May 19, 2020. In that report, analysts expect HD to post earnings of $2.32 per share. This would mark year-over-year growth of 2.2%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $27.46 billion, up 4.11% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.44 per share and revenue of $114.47 billion. These totals would mark changes of +1.85% and +3.85%, 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.13% lower. HD is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that HD has a Forward P/E ratio of 17.7 right now. This valuation marks a premium compared to its industry's average Forward P/E of 7.35.
We can also see that HD currently has a PEG ratio of 1.61. 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. The Building Products - Retail was holding an average PEG ratio of 0.69 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 44, which puts it in the top 18% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.