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
Be a smarter, better informed investor.
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
-
Stock Market Winners and Losers of the 'Big, Beautiful' BillDefense, manufacturing and tech should prosper, while health care and green energy stocks face hurdles.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have MillionsPrivate market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It HelpsSaving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
With Buffett Retiring, Should You Invest in a Berkshire Copycat?Warren Buffett will step down at the end of this year. Should you explore one of a handful of Berkshire Hathaway clones or copycat funds?
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard AboutTiming is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional StrainEarly conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
Dow Adds 238 Points as UNH, CAT Pop: Stock Market TodayThe lack of a September jobs report didn't seem to worry market participants, with the data delayed due to the ongoing government shutdown.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term PlanThe new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
