Home Depot (HD) Stock Price Target, Earnings Estimate Lowered by Analysts

NEW YORK (TheStreet) -- Shares of Home Depot (HD) are dropping 0.38% to $111.91 in Wednesday's early morning trading after Cantor Fitzgerald lowered its 2015 EPS estimate to $5.19 per share from $5.28, and decreased the price target to $106 from $108.

The analyst firm's "hold" rating remains unchanged, as the company's beat-and-raise release benefits from a favorable tax settlement, analysts said.

The price target drop was due to analysts inputting their reduced estimates into their discounted free cash flow model.

Similarly, they reduced the 2015 EPS estimate as a result of their lower sales forecast and a slightly higher share count versus their prior model.

The Atlanta-based company is a home improvement retailer that sells a variety of materials ranging from lawn and garden products to kitchen and bath products.

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, impressive record of earnings per share growth, compelling growth 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:

  • Powered by its strong earnings growth of 43.83% and other important driving factors, this stock has surged by 46.69% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 43.8% 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 ($5.22 versus $4.72).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 36.1% when compared to the same quarter one year prior, rising from $1,013.00 million to $1,379.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 8.3%. 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 Ratings Report

More from Markets

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

Dow Posts First Gain in Nine Sessions; Oil Jumps

Dow Posts First Gain in Nine Sessions; Oil Jumps