Is Home Depot Stock Still a Buy After Its Beat-And-Raise Quarter?
Home Depot stock is struggling for direction even after the retailer's strong earnings and full-year outlook, but Wall Street isn't worried.
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."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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
-
7 Ways to Kick Off an Estate Planning Talk With Your ParentsIt can be hard for aging parents to discuss estate plans — and for adult kids to broach the topic. Here are seven questions to get the conversation started
-
4 Reasons Why the Dollar Remains the World HeavyweightThe dollar may have taken a beating lately, but it's unlikely to be overtaken as the leading reserve currency any time soon. What's behind its staying power?
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
7 Questions to Help Kick Off an Estate Planning Talk With Your Parents
It can be hard for aging parents to discuss estate plans — and for adult kids to broach the topic. Here are seven questions to get the conversation started
-
Down But Not Out: 4 Reasons Why the Dollar Remains the World Heavyweight
The dollar may have taken a beating lately, but it's unlikely to be overtaken as the leading reserve currency any time soon. What's behind its staying power?
-
What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You EverythingGen X and Millennials are expected to receive trillions of dollars in inheritance. Unless it's managed properly, the money could slip through their fingers.
-
'The Money Prism' Solves Retirement Money's Biggest Headache: Here's HowThis simple, three-zone system (Blue for bills, Green for paycheck, Red for growth) helps you organize your retirement savings by purpose and time.
-
No, AI Can't Plan Your Retirement: This (Human) Investment Adviser Explains WhyAI has infinite uses. But creating an accurate retirement strategy based on your unique goals is one place where its possibilities seem lacking.
-
A Value Focus Clips Returns for This Mairs & Power Growth FundRough years for UnitedHealth and Fiserv have weighed on returns for one of our favorite mutual funds.
-
Small-Cap Stocks Gain Momentum. That's Good News for This iShares ETFThe clouds appear to be parting for small-cap stocks, which bodes well for one of our favorite exchange-traded funds.
-
Don't Let a 60/40 Portfolio Derail Your Retirement: Why a Cookie-Cutter Approach Could Cost YouChoosing a personalized retirement investment plan, rather than relying on the 60/40 portfolio, could help protect your savings and ensure long-term growth.
