Home Depot (HD), a home improvement retailer, is set to announce its Q3 results on November 12. Wall Street analysts expect the company to report earnings of $3.64 per share, down 4.7% year-over-year. On the contrary, revenues are expected to grow by 4% from the year-ago quarter to $39.25 billion, according to data from the TipRanks Forecast page.
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It’s important to highlight that despite economic volatility, the company has surpassed the consensus EPS estimates in all of the last nine quarters. This reflects HD’s strong fundamentals, brand power, and market dominance.
Key Takeaways from TipRanks’ Bulls & Bears Tool
According to TipRanks’ Bulls Say, Bears Say tool pictured below, bulls believe that Home Depot is primed for market share growth as the home improvement cycle picks up, especially within its Pro segment, where demand is likely to surge as larger projects resume. This Pro segment serves contractors and builders who buy products in larger quantities and more frequently than typical consumers.
Additionally, HD’s expansion of trade credit for professionals could drive a 10-20% boost in revenue productivity, enhancing its market position.
Meanwhile, bears remain concerned about macro uncertainties and softening consumer demand. They note that profitability may be limited due to rising expenses. Also, the analysts believe that store closures may impact both sales and overall profitability.
Options Traders Anticipate a 4.56% Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 4.56% move in either direction.
Is Home Depot Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 21 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 38.5% rally in its share price over the past year, the average HD price target of $421.83 per share implies 5.61% upside risk from current levels.
