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

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Home Depot (HD) closed the most recent trading day at $364.62, moving +1.78% from the previous trading session. This change outpaced the S&P 500's 0.3% gain on the day.

Prior to today's trading, shares of the home-improvement retailer had gained 6.64% over the past month. This has outpaced the Retail-Wholesale sector's gain of 2.41% and the S&P 500's gain of 4.28% in that time.

HD will be looking to display strength as it nears its next earnings release, which is expected to be November 16, 2021. In that report, analysts expect HD to post earnings of $3.32 per share. This would mark year-over-year growth of 4.4%. Our most recent consensus estimate is calling for quarterly revenue of $34.46 billion, up 2.77% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.50 per share and revenue of $145.45 billion. These totals would mark changes of +20.53% and +10.1%, respectively, from last year.

Any recent changes to analyst estimates for HD should also be noted by investors. 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.

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.

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. The Zacks Consensus EPS estimate has moved 0.34% higher within the past month. HD currently has a Zacks Rank of #2 (Buy).

Digging into valuation, HD currently has a Forward P/E ratio of 24.7. For comparison, its industry has an average Forward P/E of 17.29, which means HD is trading at a premium to the group.

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. The Building Products - Retail industry currently had an average PEG ratio of 1.97 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 13, putting it in the top 6% 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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