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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 $325.20, moving -1.24% from the previous trading session. This change lagged the S&P 500's 1.29% gain on the day. Meanwhile, the Dow gained 0.78%, and the Nasdaq, a tech-heavy index, lost 4.94%.

Prior to today's trading, shares of the home-improvement retailer had gained 3.61% over the past month. This has lagged the Retail-Wholesale sector's gain of 6.05% and the S&P 500's gain of 5.64% 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. On that day, Home Depot is projected to report earnings of $3.28 per share, which would represent year-over-year growth of 2.18%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.97 billion, up 0.71% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Home Depot. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. Within the past 30 days, our consensus EPS projection has moved 0.07% lower. Home Depot is holding a Zacks Rank of #4 (Sell) right now.

Valuation is also important, so investors should note that Home Depot has a Forward P/E ratio of 19.35 right now. This valuation marks a premium compared to its industry's average Forward P/E of 12.21.

Meanwhile, HD's PEG ratio is currently 1.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Retail industry currently had an average PEG ratio of 1.72 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 159, which puts it in the bottom 37% 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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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