Home Depot (HD) closed at $338.91 in the latest trading session, marking a -1.11% move from the prior day. This move lagged the S&P 500's daily gain of 0.8%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 1.6%.
Heading into today, shares of the home-improvement retailer had gained 0.37% over the past month, lagging the Retail-Wholesale sector's gain of 7.22% and the S&P 500's gain of 5.15%.
Market participants will be closely following the financial results of Home Depot in its upcoming release. The company is predicted to post an EPS of $3.42, indicating a 3.93% decline compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $41.53 billion, indicating a 4.2% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.03 per share and a revenue of $171.13 billion, signifying shifts of +2.31% and +3.91%, respectively, from the last year.
Investors should also pay attention to any latest changes in analyst estimates for Home Depot. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Home Depot is currently a Zacks Rank #3 (Hold).
In terms of valuation, Home Depot is currently trading at a Forward P/E ratio of 22.81. This valuation marks a premium compared to its industry average Forward P/E of 21.1.
Investors should also note that HD has a PEG ratio of 3.74 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Retail - Home Furnishings industry was having an average PEG ratio of 1.56.
The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 97, putting it in the top 40% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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The Home Depot, Inc. (HD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).