Home Depot (HD) stock is struggling for direction Tuesday after the home improvement retailer beat top- and bottom-line expectations for its third quarter and raised its full-year outlook.
In the three months ended October 27, Home Depot's revenue increased 6.6% year over year to $40.2 billion even as its comparable-store sales dipped 1.3% – including a 1.2% decline in the United States. Meanwhile, its earnings per share (EPS) decreased 1.8% from the year-ago period to $3.78.
"While macroeconomic uncertainty remains, our third-quarter performance exceeded our expectations," said Home Depot CEO Ted Decker in a statement. "As weather normalized, we saw better engagement across seasonal goods and certain outdoor projects as well as incremental sales related to hurricane demand. I would like to thank all of our associates for their dedication in serving our customers and communities."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results handily beat analysts' expectations. Wall Street was anticipating revenue of $39.3 billion and earnings of $3.64 per share, according to CNBC.
As a result of its strong performance, Home Depot raised its full-year outlook. The company now expects to achieve revenue growth of approximately 4%, up from its previous forecast of 2.5% to 3.5%. It added that it expects its earnings per share to decline approximately 1% from the prior year, compared with its previous forecast for a drop of 1% to 3%.
Is Home Depot stock a buy, sell or hold?
Home Depot has done well on the price charts so far in 2024, up 20% on a total return basis (price change plus dividends). And Wall Street is overwhelmingly bullish toward the Dow Jones stock.
According to S&P Global Market Intelligence, the average analyst price target is $414.98, representing implied upside of nearly 3% to current levels. Additionally, the consensus recommendation among the 40 covering analysts it tracks is a Buy.
Financial services firm Truist Securities is one of the most bullish outfits on the consumer discretionary stock with a Buy rating and $459 price target.
"While the company had the benefit of favorable/warm weather for most of the quarter and incremental storm-related sales, third quarter unequivocally came in better than what we expected three months ago," says Truist analyst Scot Ciccarelli.
The analyst adds that proprietary data indicated that sales trends continued to improve over the three-month period, both before and after the devastating hurricanes that hit this season.
"Further, as we highlighted in our preview, our data indicated that October was the first monthly year-over-year sales gain for Home Depot and Lowe's (LOW, Buy) in well over two years, which we think is an important inflection in trend," he says.
Related Content
-
4 Money Habits Boomers Swore By That Millennials Are Walking Away FromMillennials are trading tradition for flexibility when it comes to building wealth.
-
Abu Dhabi Adventures: New Thrills, Iconic Sights and Disney’s Latest ParkDiscover the mix of culture, wildlife and modern marvels that make this Middle Eastern city a destination to watch.
-
How Much Do I Need to Retire? A Financial Professional Breaks Down Your OptionsWhat it all boils down to is will you be comfortable in retirement? Some people may rely on formulas, while others just aim for $1 million nest egg.
-
Despite Our Grumbles, America Still Delivers on the Dream: Perspective From a Financial Pro Who's Seen StuffSome of us might complain about the state of our nation (and those concerns are legit), but America still offers unparalleled opportunities and mobility that many people around the world only dream about.
-
Dow Rips 846 Points to New All-Time High: Stock Market TodayFed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
Bonds Pay in Good and Bad TimesBonds can act as a financial safety net through good times and bad. But different bonds carry different returns and risks, so do your homework before investing.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's StrategyInvestors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your HeirsIn troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market TodayStocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
A Timeline of Warren Buffett's Life and Berkshire HathawayBuffett was the face of Berkshire Hathaway for 60 years. Here's a timeline of how he built the sprawling holding company and its outperforming equity portfolio.
