Shares of Home Depot (HD) - Get Report slipped on Tuesday after the big-box home-improvement giant received a downgrade to neutral from buy from analysts at Guggenheim Securities, who see a ramp-up in spending and other expenses impacting earnings next year.
Shares of Home Depot fell 1.23%, or $2.85 a share, to $228.14 in early trading Tuesday after Guggenheim downgraded the company's stock, citing higher capital spending costs and increasing expenses in its fiscal 2020 year.
The Atlanta-based company in August reported second-quarter results that beat analysts' forecasts, though warned that future earnings growth will look less solid in part due to falling lumber prices and the potential impact of tariffs on consumer activity.
The company posted net income of $3.5 billion, or $3.17 a share, vs. $3.5 billion, or $3.05 a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of $3.09 a share.
As part of its most recent earnings announcement, Home Depot said it expects fiscal-year sales to grow approximately 2.3%, and comparable-store sales to increase 4%. The company also reaffirmed its earnings-per-share growth guidance for the year of $10.03. Analysts polled by FactSet are currently expecting full-year earnings of $10.13 a share.