What to Expect From Home Depot Earnings

Retail

Published: May 16, 2016 11:55 am

Last Updated: January 13, 2020 8:00 am

Home Depot Inc. (NYSE: HD) is scheduled to report its fiscal first-quarter financial results before the markets open on Tuesday. The consensus estimates call for $1.35 in earnings per share (EPS) on $22.35 billion in revenue. In the same period of last year, the specialty retailer posted EPS of $1.15 and $20.89 billion in revenue.

This company remains the undisputed leader in the home improvement retail category. With spring already in full swing and summer just around the corner, we can expect perhaps the strongest quarter out of Home Depot’s fiscal year.

In addition, analysts are thinking the continued strength seen in the housing market earlier this spring could also bode well for this company. EPS gains have consistently been in the 15% to 20% range, and a consensus of analysts see earnings continuing to grow at about 15% annually for another two to three years.

In its fourth-quarter earnings report, Home Depot raised its dividend by 17% from a quarterly rate of $0.59 per share to a new rate of $0.69. The company also reiterated its intent to repurchase $11 billion of its own stock by the end of fiscal year 2017.

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The company also noted that if currency exchange rates remain at February’s levels, net sales for 2016 would decline by $800 million and EPS would be lower by $0.06. The low end of the company’s estimates reflects this impact.

A few analysts weighed in on Home Depot ahead of the earnings report:

Jefferies has a Buy rating with a $156 price target.
Deutsche Bank reiterated a Buy rating.
Goldman Sachs has a Neutral rating with a $143 price target.
Barclays initiated coverage with an Overweight rating with a $150 price target.

So far in 2016, Home Depot has performed relatively flat compared to the broad markets. However, over the past 52 weeks, the stock is up over 20%.

Shares of Home Depot were trading up 1.9% at $135.69 Monday morning, with a consensus analyst price target of $145.87 and a 52-week trading range of $92.17 to $137.82.

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