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Home Depot (HD) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Home Depot (HD) closed at $328.09, marking a +1.21% move from the previous day. This move outpaced the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 0.02%, and the Nasdaq, a tech-heavy index, added 9.7%.

Heading into today, shares of the home-improvement retailer had gained 2.61% over the past month, lagging the Retail-Wholesale sector's gain of 11.69% and the S&P 500's gain of 6.27% in that time.

Wall Street will be looking for positivity from Home Depot as it approaches its next earnings report date. This is expected to be February 21, 2023. In that report, analysts expect Home Depot to post earnings of $4.12 per share. This would mark year-over-year growth of 28.35%. Our most recent consensus estimate is calling for quarterly revenue of $35.97 billion, up 0.71% from the year-ago period.

Any recent changes to analyst estimates for Home Depot should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Home Depot is currently a Zacks Rank #4 (Sell).

Investors should also note Home Depot's current valuation metrics, including its Forward P/E ratio of 19.48. For comparison, its industry has an average Forward P/E of 11.88, which means Home Depot is trading at a premium to the group.

We can also see that HD currently has a PEG ratio of 1.73. 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. Building Products - Retail stocks are, on average, holding a PEG ratio of 1.73 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 222, which puts it in the bottom 12% 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.

To follow HD in the coming trading sessions, be sure to utilize Zacks.com.

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The Home Depot, Inc. (HD) : Free Stock Analysis Report

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