Home Depot (HD) Gains But Lags Market: What You Should Know

In the latest trading session, Home Depot (HD) closed at $235.62, marking a +0.61% move from the previous day. This change lagged the S&P 500's 1% gain on the day.

Heading into today, shares of the home-improvement retailer had gained 1.38% over the past month, outpacing the Retail-Wholesale sector's loss of 2.76% and the S&P 500's loss of 1.22% in that time.

HD will be looking to display strength as it nears its next earnings release, which is expected to be November 19, 2019. In that report, analysts expect HD to post earnings of $2.52 per share. This would mark year-over-year growth of 0.4%. Our most recent consensus estimate is calling for quarterly revenue of $27.48 billion, up 4.46% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.12 per share and revenue of $110.71 billion, which would represent changes of +2.33% and +2.32%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for HD. Recent revisions tend to reflect the latest 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. 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 23.15 right now. This valuation marks a premium compared to its industry's average Forward P/E of 13.75.

Also, we should mention that HD has a PEG ratio of 2.29. 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. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.34 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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