Home Depot Posts Strong Q4 Results; Shares Gain Pre-Market

Shares of The Home Depot (HD) gained 1.4% at the time of writing after delivering better-than-expected results for the fourth quarter of Fiscal 2021 (ended January 30, 2022). The company is a home improvement retailer and offers installation services as well as tool and equipment rental.

During the quarter, net earnings jumped 21.1% year-over-year to $3.21 per share and surpassed analysts’ expectations of $3.18 per share. Similarly, revenues increased 10.7% year-on-year to $35.7 billion, topping the Street’s estimate of $34.9 billion.

Comparable sales were up 8.1%, and comparable sales in the U.S. surged 7.6%. Though customer transactions declined 3.4% in the fourth quarter, the average purchase ticket size increased 12.4% to $85.11 from $75.69 in the year-ago period.

For the Fiscal Year 2021, the company reported net earnings of $15.53 per share, up 30.1% from the previous year. Also, sales rose 14.4% year-over-year to $151.2 billion.

Dividend Hike

Alongside earnings, Home Depot announced plans to raise its dividend by 15% to $1.90 per share. The dividend is payable on March 24, 2022, to shareholders of record on the close of business on March 10, 2022.

Guidance

The company projects sales growth and comparable sales growth to be slightly positive. Net interest expense is expected to be about $1.5 billion. Also, earnings per share are expected to grow in the low single digits.

Wall Street’s Take

Overall, the Street has a Strong Buy consensus rating based on 10 Buys and 2 Holds. The average Home Depot price target of $428.55 implies about 23.6% upside potential from current levels.

News Sentiment

News Sentiment for Home Depot is Very Positive based on 57 articles over the past seven days. All the articles have Bullish sentiment, compared to a sector average of 63%, and none have Bearish Sentiment, compared to a sector average of 37%.

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