How To Play The Home Depot, Inc. (HD)’s Earnings Report

47 days have passed by since the last earnings report for The Home Depot, Inc. (NYSE:HD) and the new quarterly results look set to arrive in 44 days. The shares of HD at the moment are trading at a volume of 3.15 million, which compares with its normal daily standard volume of 3.77 million shares. This has led to the shares of the company advancing by 0.49%, currently exchanging hands at $227.93 a share. HD stock has been up by $7.56 (-3.21%) ever since it reached its 52-week high of $235.49 back in September 12, 2019. It has progressed above its 50-day moving average of $226.41 and is down -0.84% over the past week. The stock has added 9.6% since the last one arrived so the question here is that will the upbeat trend in that time frame continue leading up to its next earnings release, or is the HD share price due for a correction?

The Home Depot, Inc. (HD) Forecasts And Latest Quarter Earnings

Ahead of their fiscal third-quarter to be released on Tuesday, Nov 19, 2019, 28 analysts who are covering the company are estimating that it will record a profit of $2.52 per share, with analysts having different outlooks from $2.47 to $2.58. The current agreed outlook, when compared to the profit recorded last year, is at $2.51 a share, thus an increase of 0.4% is expected. The profit view for a complete financial year for The Home Depot, Inc. is expected to be around $10.13 in current year, a growth of nearly 2.43% from last year which was $9.89.

Let’s now look at their sales section, HD’s revenue is estimated to be $26302, a figure which is more than the $26302 recorded for Q3 last year. Their sequential sales though are expected to fall by -10.77% from their Q2’s sales which were $30.84B. Their full-year outlook is pegged at $110.76B, implying that there would be an increase of 2.37% over the $108.2B they recorded last year in revenue. The Home Depot, Inc. is projected to get sales lifted by 4.39% in the next quarter, with a revenue target of $115.62B.

Analyzing The Earnings History Of The Home Depot, Inc. (NYSE:HD)

In the past few years, the HD stock has been known to miss the Wall Street’s earnings projection. The company missed 0% of the time, according to the data pulled on their earnings, was able to meet predictions on 0 occasions and topped expectations 12 times. Looking at the past trend, the price of The Home Depot, Inc. shares had risen following the release of their earnings in 23 of the last 39 quarters.

Looking back, here is how The Home Depot, Inc. (HD) stock reacted to earnings misses and beats. It gave investors reason to cast doubts with the price going down after 2 of the last four earnings reports. The shares of The Home Depot, Inc. recorded 4.4%, 0.26%, -0.88% and -0.24%, respectively, on the first day of past earnings releases. After a week of earnings reports, the changes were 5.15%, 0.31%, -3.25% and -3.25%. Their post-earnings price movements have resulted in an average increase of 0.89% and an average decrease of -0.26% in The Home Depot, Inc. on next day and 7th day, sequentially. HD’s one month stock performance led to its shares declining by -0.1% with a return of 11.87% witnessed over the last 52 weeks.

The higher number of analysts has assigned a buy or better ratings (19) on the The Home Depot, Inc. stock, while 12 of them have a rating of a Hold with the 11-year target price suggested by the analysts standing at $227.26. This price target implies potential upside of -0.29 percent over the next 12 months based on the current share price.

The Home Depot, Inc. (HD) Post Earnings Announcement Drift (PEAD)

Back on August 20, 2019, The Home Depot, Inc. (NYSE:HD) released its Q2 results, in which it recorded EPS of $3.17 that exceeded consensus estimates of $3.08. After the earnings were reported, the price of HD stock kicked off the session at $212.17 and remained in a range of $213.5 to $217.85 on the first day. The shares were priced at $217.09 at the close with a total volume of shares being 12455056.

On May 21, 2019, the Q1 earnings report was disclosed with EPS of $2.27. This was above the estimation of $2.18 per share. The stock price range of HD was between $187.13 and $192.52 on the first-day post announcement, after opening the day at $186.34. The session came to close at $191.45 and there was a total volume of 8555840 shares.

February 26, 2019 was the day when its Q4 results were unveiled. The earnings came in at $2.25, beating the projected $2.16 per share. The very next day, HD stock opened at $182.8 while staying in a range of $185.59 to $188.47. At the end, it moved to $188.3 a total volume of shares been 13635082.

In the year-ago Q3 earnings on November 13, 2018, the company saw profit per share of $2.51. That was better than the $2.26 analysts had expected. The Home Depot, Inc. share price started at $172.85 on the first full trading day post-earning and then exchanged hands between $177.3 and $181.62 throughout the session. The closing price of $179 came on the back of 14274029 shares in volume.