Retail

What Analysts Are Saying About Home Depot After Earnings

Chris Lange

Published: August 21, 2019 12:15 pm

Last Updated: January 30, 2020 5:08 pm

Home Depot Inc. (NYSE: HD) released its fiscal second-quarter financial results before the markets opened on Tuesday. Although Lowe’s seems to have won this quarter, comparatively speaking, Home Depot still came away with a gain. Analysts were fairly positive on the firm following these results.

24/7 Wall St. has included some of the highlights from the earnings report, as well as what analysts are saying after the fact.

The home improvement retailer said that it had $3.17 in earnings per share (EPS) and $30.8 billion in revenue, compared with consensus estimates of $3.08 in EPS and $30.98 billion in revenue. The same period of last year reportedly had EPS of $3.05 on $30.46 billion in revenue.

Comparable sales for the second quarter of fiscal 2019 were positive 3.0%, and comparable sales in the United States were positive 3.1%.

Looking ahead to the fiscal full year, the company expects to see EPS of $10.03 and sales growth of roughly 2.3%. Consensus estimates call for $10.10 in EPS and $111.25 billion in revenue for the year.

Wedbush reiterated a Neutral rating and raised its price target to $230 from $190, implying an upside of roughly 6% from the most recent closing price of $217.09. The firm detailed in its report:

While the consumer has not changed behavior due to tariffs according to Home Depot, the company is conservatively building in modest comp pressure to its 2019 guidance for possible pressure in the second half of 2019. At the same time, should improving housing metrics persist on the back of lower interest rates and consumer confidence remain strong despite higher tariffs and stock market volatility, Home Depot should be well positioned to capitalize… We expect continued strong execution despite the retirement of Carol Tome, one of the best CFOs in retail. The improving prospects for housing and home improvement demand due to lower interest rates are also encouraging, but tariffs uncertainty remains.

Here’s what a few other analysts had to say:

• Robert Baird reiterated an Outperform rating and raised its target to $230 from $220.
• Loop Capital reiterated a Hold rating with a $200 price target.
• Citigroup reiterated a Buy rating and raised its target price to $246 from $218.
• UBS reiterated a Buy rating and raised its target price to $240 from $215.
• Wells Fargo reiterated an Outperform rating and raised its target to $235 from $230.
• SunTrust Banks reiterated a Hold rating with a $208 price target.

Shares of Home Depot traded up about 1% at $218.99 on Wednesday, in a 52-week range of $158.09 to $219.88. The consensus price target is $211.03.

24/7 Wall St.
Goldman Sachs Stays Positive on Top Dividend REITs as Sector Boom Continues