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

Home Depot (HD) closed the most recent trading day at $313.81, moving -1.09% from the previous trading session. This change lagged the S&P 500's daily gain of 1.1%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 6.59%.

Prior to today's trading, shares of the home-improvement retailer had gained 0.48% over the past month. This has lagged the Retail-Wholesale sector's gain of 8.83% and the S&P 500's gain of 4.58% in that time.

Home Depot will be looking to display strength as it nears its next earnings release, which is expected to be February 21, 2023. In that report, analysts expect Home Depot to post earnings of $3.28 per share. This would mark year-over-year growth of 2.18%. Our most recent consensus estimate is calling for quarterly revenue of $35.97 billion, up 0.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $16.64 per share and revenue of $157.45 billion, which would represent changes of +7.15% and +4.16%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for Home Depot. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Home Depot is currently a Zacks Rank #4 (Sell).

In terms of valuation, Home Depot is currently trading at a Forward P/E ratio of 19.07. This valuation marks a premium compared to its industry's average Forward P/E of 10.95.

It is also worth noting that HD currently has a PEG ratio of 1.7. 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 1.7 based on yesterday's closing prices.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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The Home Depot, Inc. (HD) : Free Stock Analysis Report

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