Home Depot (HD) closed at $339.62 in the latest trading session, marking a +1.03% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.62%. Elsewhere, the Dow saw an upswing of 0.58%, while the tech-heavy Nasdaq appreciated by 0.83%.
The home-improvement retailer's stock has dropped by 4.18% in the past month, falling short of the Retail-Wholesale sector's loss of 0.96% and the S&P 500's gain of 0.8%.
Investors will be eagerly watching for the performance of Home Depot in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3.42, showcasing a 3.93% downward movement from the corresponding quarter of the prior 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.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.03 per share and revenue of $171.13 billion. These totals would mark changes of +2.31% and +3.91%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Home Depot. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 0.01% fall in the Zacks Consensus EPS estimate. Home Depot currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Home Depot is presently being traded at a Forward P/E ratio of 22.37. This signifies a premium in comparison to the average Forward P/E of 20.14 for its industry.
It's also important to note that HD currently trades at a PEG ratio of 3.67. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Home Furnishings industry currently had an average PEG ratio of 1.49 as of yesterday's close.
The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 158, positioning it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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).