Home Depot (HD) Sees a More Significant Dip Than Broader Market: Some Facts to Know

In the latest trading session, Home Depot (HD) closed at $350.78, marking a -1.36% move from the previous day. This change lagged the S&P 500's daily loss of 0.06%. Elsewhere, the Dow lost 0.11%, while the tech-heavy Nasdaq lost 0.32%.

Coming into today, shares of the home-improvement retailer had gained 3.59% in the past month. In that same time, the Retail-Wholesale sector gained 7.55%, while the S&P 500 gained 3.42%.

The investment community will be paying close attention to the earnings performance of Home Depot in its upcoming release. The company is slated to reveal its earnings on August 18, 2026. The company is forecasted to report an EPS of $4.71, showcasing a 0.64% upward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $47.5 billion, indicating a 4.92% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.01 per share and a revenue of $171.65 billion, indicating changes of +2.18% and +3.29%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Home Depot. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Home Depot is currently a Zacks Rank #3 (Hold).

In the context of valuation, Home Depot is at present trading with a Forward P/E ratio of 23.69. This indicates a premium in contrast to its industry's Forward P/E of 21.58.

We can also see that HD currently has a PEG ratio of 4.11. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Home Furnishings was holding an average PEG ratio of 2.16 at yesterday's closing price.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 187, finds itself in the bottom 24% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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