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Home Depot (HD) Gains As Market Dips: What You Should Know

·3 min read

In the latest trading session, Home Depot (HD) closed at $311.97, marking a +0.74% move from the previous day. This change outpaced the S&P 500's 0.12% loss on the day. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.4%.

Coming into today, shares of the home-improvement retailer had gained 8.11% in the past month. In that same time, the Retail-Wholesale sector gained 9.21%, while the S&P 500 gained 8.25%.

Investors will be hoping for strength from Home Depot as it approaches its next earnings release, which is expected to be August 16, 2022. In that report, analysts expect Home Depot to post earnings of $4.95 per share. This would mark year-over-year growth of 9.27%. Meanwhile, our latest consensus estimate is calling for revenue of $43.34 billion, up 5.41% from the prior-year quarter.

HD's full-year Zacks Consensus Estimates are calling for earnings of $16.43 per share and revenue of $155.85 billion. These results would represent year-over-year changes of +5.8% and +3.11%, respectively.

Investors should also note any recent changes to analyst estimates for Home Depot. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.23% lower within the past month. Home Depot is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Home Depot has a Forward P/E ratio of 18.85 right now. Its industry sports an average Forward P/E of 10.74, so we one might conclude that Home Depot is trading at a premium comparatively.

Meanwhile, HD's PEG ratio is currently 1.71. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Retail industry currently had an average PEG ratio of 2.02 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 57, which puts it in the top 23% 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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