The Home Depot Inc. (HD) is looking forward to a strong quarter

The Home Depot Inc. (NYSE: HD) stock fell -0.89% on Friday to $269.14 against a previous-day closing price of $271.57. With 3.51 million shares changed hands, the volume of the stock remained heavier than its average volume of 3.39 million shares. During the session, the Home Improvement Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $271.22 whereas the lowest price it dropped to was $267.85. The 52-week range on HD shows that it touched its highest point at $420.61 and its lowest point at $264.51 during that stretch. It currently has a 1-year price target of $354.97. With its current market cap of 271.10 billion, HD has annualized dividend of $7.60 while the current yield stands at 2.82%. Beta for the stock currently stands at 0.99.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of HD was down-trending over the past week, with a drop of -0.88%, but this was down by -12.30% over a month. Three-month performance dropped to -2.28% while six-month performance fell -15.11%. The stock lost -19.88% in the past year, while it has lost -35.15% so far this year. A look at the trailing 12-month EPS for HD yields 16.27 with Next year EPS estimates of 17.36. For the next quarter, that number is 4.11. This implies an EPS growth rate of 30.10% for this year and 4.69% for next year. EPS is expected to grow by 15.70% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 19.20%.

Float and Shares Shorts:

At present, 1.02 billion HD shares are outstanding with a float of 1.02 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 7.84 million, which was 0.76% higher than short shares on Jun 14, 2022. In addition to Mr. Edward P. Decker as the firm’s Pres, CEO & Director, Mr. Richard V. McPhail serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 71.10% of HD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 4.17% of HD, in contrast to 38.39% held by mutual funds. Shares owned by individuals account for 33.07%. As the largest shareholder in HD with 8.70% of the stake, The Vanguard Group, Inc. holds 89,080,504 shares worth 89,080,504. A second-largest stockholder of HD, BlackRock Fund Advisors, holds 46,289,351 shares, controlling over 4.52% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in HD, holding 45,908,300 shares or 4.48% stake. With a 2.97% stake in HD, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 30,429,589 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.25% of HD stock, is the second-largest Mutual Fund holder. It holds 23,061,927 shares valued at 6.65 billion. Fidelity 500 Index Fund holds 1.08% of the stake in HD, owning 11,095,642 shares worth 3.2 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for HD since 34 analysts follow the stock currently. There are 18 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With HD analysts setting a high price target of $470.00 and a low target of $300.00, the average target price over the next 12 months is $358.93. Based on these targets, HD could surge 74.63% to reach the target high and rise by 11.47% to reach the target low. Reaching the average price target will result in a growth of 33.36% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. HD will report FY 2023 earnings on 02/21/2023. Analysts have provided yearly estimates in a range of $16.85 being high and $16.36 being low. For HD, this leads to a yearly average estimate of $16.58. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The Home Depot Inc. surprised analysts by $0.10 when it reported $5.05 EPS against a consensus estimate of $4.95. The surprise factor in the prior quarter was $0.40. Based on analyst estimates, the high estimate for the next quarter is $4.20 and the low estimate is $4.03. The average estimate for the next quarter is thus $4.11.

Summary of Insider Activity:

Insiders traded HD stock several times over the past three months with 0 Buys and 2 Sells. In these transactions, 0 shares were bought while 12,650 shares were sold. The number of buy transactions has increased to 35 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 199,461 while 138,403 shares were sold.

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