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Home Depot: Analysis And Six-Month Price Projection NYSE:HD

Other large national retailers like Costco and Walmart are seeing higher customer traffic, but Home Depot has catered to 3% fewer guests through the first half of the year. Demand is slowing among both its do-it-yourself shoppers and its professional contractor niche, management said in a recent conference call with investors. As of September 30th, there was short interest totaling 9,010,000 shares, a decrease of 8.9% from the September 15th total of 9,890,000 shares. Based on an average daily trading volume, of 2,900,000 shares, the days-to-cover ratio is currently 3.1 days. By 1995 Home Depot operated 350 stores across the contiguous US.

  • We’ll first take a look at the raw data supplied by Home Depot, then look at what it might mean in terms of Home Depot’s possible performance over the next six months.
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  • Obviously, we cannot know what that is in advance, and that will determine the exact stock price at any point in time.
  • Thus, choosing the midpoint of the range of likely market multiples from the above table, 21, that leaves a projected stock price of $99.12 after Home Depot reports its fiscal earnings in February 2014.
  • By 1995 Home Depot operated 350 stores across the contiguous US.
  • Third, HD management lost part of their earnings “cushion” in 2012, but made adjustments and got it back almost in full for their 2013 forecast.

The economic crisis of 2009 also reversed during Home Depot’s second quarter, making it a particularly interesting quarter for comparison for this company. We sort through +4,000 ETFs/CEFs along with +16,000 U.S. stocks/ADRs to find the best trade ideas. Click here for a two-week free trial and explore our content at the Conviction Dossier.

Is it profitable to

This repurchase authorization allows the company to purchase up to 4.6% of its stock through open market purchases. Stock repurchase plans are generally a sign that the company’s management believes its stock forex tester 4 simulator review is undervalued. Home Depot announced a quarterly dividend on Thursday, August 17th. Shareholders of record on Thursday, August 31st will be given a dividend of $2.09 per share on Thursday, September 14th.

The strong point was a 19.4% increase in operating income as the company was able to keep expenses in check evident by SG&A climbing just 1.5% y/y. Management noted that the company is now lapping what were significant COVID-related expenses in the first half of 2020 when employees were offered bonuses and operations faced disruptions. Home Depot remains well ahead of peer Lowe’s (LOW 1.28%) on this score, partly because of its stronger market share position with professional contractors. Yet if these customers continue seeing shrinking project backlogs, the earnings outlook might darken.

Part of that slump is due to transitory challenges like the sharp drop in lumber prices. Management cited this pressure as the main reason why average spending has been flat this year at $90 per visit. As the AI market heats up, investors who have a vision for artificial intelligence have the potential to see real returns. Learn about the industry as a whole as well as seven companies that are getting work done with the power of AI.

As a result of the potential volatility, new investors may want to wait a little longer and wait for the housing situation/ the short-term downtrend to stabilize, despite the tempting dividend returns. Dividend Per Share is a financial indicator equal to the ratio of the company’s net profit available for distribution to the annual average of ordinary shares. By the end of the second quarter, management typically has a pretty good idea how earnings are tracking for the full fiscal year. Next, we look at the forecasts made by management after the second quarter and how they stacked up after the figures for the full fiscal year were in.

  • The Home Depot stock forecasts are adjusted once a day based on the closing price of the previous trading day.
  • Second, management has been much closer to the actual result in its revenue forecasts than it has been in its revenue forecasts.
  • The consensus among Wall Street equities research analysts is that investors should “moderate buy” HD shares.

Below, we make a projection of the HD stock price for the period after the company reports full-year fiscal 2014 earnings in February. To do that, we have to examine how to find overbought stocks the company’s – and the stock’s – past performance in some detail. Even if you don’t believe in projections, you may find some of the analysis of interest.

Quotes and Performance

The consensus among Wall Street equities research analysts is that investors should “moderate buy” HD shares. All forecast data on the site are provided for informational purposes of using neural forecasting tools in the financial market and are not a call to action and,
moreover, are not trading signals. When using the forecast data, the investor assumes all financial risks. The portal is not responsible for the loss of your money in the stock market
as a result of using the information contained on the site. Looking ahead, the market sees growth and earnings in the low to mid-single digits through fiscal 2025.

Stock Price Prediction, Stock Forecast for next months and years

The Home Depot began offering delivery with Walmart GoLocal across select markets, and expanded across multiple markets across the country by end-2021. The retailer also declared a quarterly dividend of $1.90 per share, which equates to an annual dividend of $7.60 per share. The dividend is payable on 24 March, to shareholders as of the record date 10 March. The stellar earnings in the final quarter of the fiscal year 2021 and the entirety of the fiscal year ended 30 January 2022, reflect the company’s strong sales.

Earnings and Sales Forecasts

However, as shown above, Home Depot’s multiple for the past five years, since the recovery from the 2009 financial crisis, has hovered between 18 and 23. So, using projected annual earnings of $4.72, we get the following projections for that range of multiples. The earnings reports delivered each February after the completion of the full fiscal year naturally affect the stock price in a big way. To get an idea of how the market has valued the stock in recent years, let’s take a look at both the full-year earnings numbers and the stock price on the immediately following 1 March. This date is always a few days after the earnings report and gives traders a chance to digest it after the initial knee-jerk reaction.

Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Past performance is not a guarantee of future results, and a loss of original capital may occur. None of the information presented should be construed as an offer to sell or buy any particular security.

The most recent data shows that U.S. housing starts jumped 15.7% in July 2014 over the previous month. That has to be good news for Home Depot – all those builders and new homeowners will be hurrying down to buy water hoses and shovels and light fixtures and building materials. While the July figure could be a temporary blip, it still falls squarely within the middle of Home Depot’s fiscal year and suggests strength for the remainder of the warm weather months. The company’s current earnings forecast for fiscal year 2014 is $4.52/share. Adding an additional 5.2%, or $0.20, gives an adjusted earnings projected result of $4.72 for the 2014 fiscal year.

At the time of writing on 10 March, analysts predicted The Home Depot stock would move up ahead, owing to the strong demand for its diverse range of products and services. Out of the most recent ratings, Morgan Stanley analyst Simeon Gutman rated the stock as ‘overweight’, lowering the stock price target from $420 to $380 on 23 February. In addition, Loop Capital’s Laura Champine also lowered the stock price target from $380 to $320. As of 10 March, over the period of five years HD stock price surged 116%, in comparison to an 80.3% surge in the S&P 500 index during the same period. In particular, the stock price marked a strong uptick from March 2020, around the time when the pandemic tightened its grip around the world.

Or, perhaps they just want a bigger cushion on the earnings number rather than the revenue one because casual new-readers focus on the earnings number more. In this chart, 2013 fxpro forex broker review again stands out, when the comp store sales peaked. However, the 2014 numbers are still the second best during the entire period, so the company is still executing well.

Technical Analysis

Thus, presumably they are back on track with their forecasting style after that minor blip and have returned to doing their regular thing again – consistently underestimating their earnings in their public forecasts. The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in. A major reason behind the stock’s strong upward momentum was the increase in overall sales, owing to high-priced items such as home appliances and vinyl plank flooring, along with installation services.

The company ended the quarter with $5.1 billion in cash and equivalents against $36.7 billion in long-term financial debt. Considering EBITDA of $25.1 billion over the trailing twelve months, net debt to an EBITDA leverage ratio of 1.3x highlights an overall strong balance sheet and liquidity position. While the company is not providing any financial guidance, management maintained a positive tone during the earnings conference call noting strong customer engagement and healthy demand into Q4. The Home Depot’s net earnings rose to $3.4bn in the fiscal fourth quarter from $2.9bn a year earlier.

1984 also brought the company’s first expansions outside its home territory of Georgia. By the end of the year, there were 19 Home Depots, and by 1989 it was indeed the largest home improvement retailer in the U.S. Not long after, to spur additional growth, the company added a line of product installation services that was very successful. That same year, in 1991, the company began making its first major acquisitions. On the other hand, we prefer to cautiously rate HD as a Hold (Neutral) here.

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