Home Depot (HD) Dips More Than Broader Markets: What You Should Know

Home Depot (HD) closed at $175.66 in the latest trading session, marking a -1% move from the prior day. This change lagged the S&P 500's 0.22% loss on the day. Meanwhile, the Dow lost 0.11%, and the Nasdaq, a tech-heavy index, lost 0.25%.

Prior to today's trading, shares of the home-improvement retailer had gained 0.88% over the past month. This has lagged the Retail-Wholesale sector's gain of 4.4% and the S&P 500's gain of 3.57% in that time.

Investors will be hoping for strength from HD as it approaches its next earnings release, which is expected to be February 19, 2019. In that report, analysts expect HD to post earnings of $2.17 per share. This would mark year-over-year growth of 28.4%. Our most recent consensus estimate is calling for quarterly revenue of $26.61 billion, up 11.42% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.77 per share and revenue of $108.28 billion, which would represent changes of +30.97% and +7.31%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for HD. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 2.22% higher. HD is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, HD is holding a Forward P/E ratio of 18.16. For comparison, its industry has an average Forward P/E of 12.53, which means HD is trading at a premium to the group.

Also, we should mention that HD has a PEG ratio of 1.39. 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 was holding an average PEG ratio of 1.21 at yesterday's closing price.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 164, putting it in the bottom 36% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.