Will Home Depot (HD) Stock Get a Boost From Earnings Growth Expectations?
NEW YORK (TheStreet) -- The Home Depot (HD) - Get Report is scheduled to report its third quarter 2015 earnings results on Tuesday before the market opens.
Year-over-year both profit and revenue are expected to increase.
Analysts are anticipating the Atlanta-based home improvement retailer to earn $1.32 on revenue of $21.76 billion for the latest quarter.
In the same period the year prior, the company earned $1.11 a share on revenue of $20.5 billion.
So far, continued recovery in the U.S. housing market is likely to help Home Depot, according to Zacks Equity Research.
However, profits for the recent quarter may be impacted by currency fluctuations and growing competition from specialty stores.
Home Depot shares are decreasing 0.8% to $119.04 on Monday.
Separately, TheStreet Ratings team rates HOME DEPOT INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
We rate HOME DEPOT INC (HD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.70% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- HOME DEPOT INC has improved earnings per share by 13.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HOME DEPOT INC increased its bottom line by earning $4.72 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($5.30 versus $4.72).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 9.0% when compared to the same quarter one year prior, going from $2,050.00 million to $2,234.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, HOME DEPOT INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HD