While it appears as if existing and new home sales have slowed their rate of deterioration, the earnings and revenue estimates for Home Depot indicate that fiscal 2009 (ends January 2010) continues to see downward earnings and revenue revisions, as analyst consensus is now expecting a 7% revenue decline and an 8% earnings decline through 2009, down from an expected 3% revenue decline and 10% earnings growth just two quarters ago.

There is no end yet to downward revisions of Home Depot's forward estimates.

The one bright spot for value investors is that, as foreclosures grow as a percentage of existing home sales, these frequently heavily damaged homes require quite a bit of repair once the new buyer assumes the foreclosed property. According to a recent research note out of Jesup & Lamont (dated Oct. 27, 2008), "foreclosures in the third quarter rose 71% year over year, with six states -- California, Nevada, Arizona, Michigan, Ohio and Florida -- accounting for 60% of total foreclosures."

Those six states contain 590 of Home Depot's 1,950 total U.S. store base, or 30% of the U.S. stores.