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

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Home Depot (HD) closed at $358.23 in the latest trading session, marking a +0.07% move from the prior day. The stock lagged the S&P 500's daily gain of 0.37%.

Coming into today, shares of the home-improvement retailer had gained 7.11% in the past month. In that same time, the Retail-Wholesale sector lost 0.05%, while the S&P 500 gained 2.13%.

Wall Street will be looking for positivity from HD as it approaches its next earnings report date. This is expected to be November 16, 2021. On that day, HD is projected to report earnings of $3.32 per share, which would represent year-over-year growth of 4.4%. Meanwhile, our latest consensus estimate is calling for revenue of $34.46 billion, up 2.77% from the prior-year quarter.

HD's full-year Zacks Consensus Estimates are calling for earnings of $14.50 per share and revenue of $145.45 billion. These results would represent year-over-year changes of +20.53% and +10.1%, respectively.

Investors should also note any recent changes to analyst estimates for HD. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. The Zacks Consensus EPS estimate has moved 0.34% higher within the past month. HD currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, HD is holding a Forward P/E ratio of 24.68. Its industry sports an average Forward P/E of 16.91, so we one might conclude that HD is trading at a premium comparatively.

We can also see that HD currently has a PEG ratio of 2.54. 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 1.97 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 14, putting it in the top 6% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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