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Home Depot (HD) Dips More Than Broader Market: What You Should Know

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The most recent trading session ended with Home Depot (HD - Free Report) standing at $401.85, reflecting a -1.12% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.05% loss on the day. On the other hand, the Dow registered a loss of 0.02%, and the technology-centric Nasdaq increased by 0.18%.

Shares of the home-improvement retailer have appreciated by 3.68% over the course of the past month, outperforming the Retail-Wholesale sector's gain of 1.71% and the S&P 500's gain of 2.76%.

The investment community will be paying close attention to the earnings performance of Home Depot in its upcoming release. It is anticipated that the company will report an EPS of $3.64, marking a 4.46% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $39.23 billion, showing a 4.04% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $15 per share and revenue of $157.51 billion, indicating changes of -0.73% and +3.17%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for Home Depot. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.01% higher. Right now, Home Depot possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Home Depot is presently trading at a Forward P/E ratio of 27.09. This indicates a premium in contrast to its industry's Forward P/E of 21.93.

Investors should also note that HD has a PEG ratio of 2.81 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. HD's industry had an average PEG ratio of 3.68 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 204, which puts it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.


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