Earnings Previews: APA, Home Depot, Macy's, Medtronic, Williams

Home Depot

Home Depot Inc. (NYSE: HD) has added about 29% to its share price over the past 12 months. Since posting a recent high in late December, the stock has dropped by more than 16% on investors’ concerns over rising interest rates and the effect that could have on home building and remodeling.

Home Depot benefitted from the pandemic as people took the opportunity to make improvements to their dwellings, but that benefit is likely gone now. New CEO Ted Decker, a 22-year veteran at the company, is moving to the corner office on March 1. The Dow component reports results before markets open Tuesday.

Of 33 analysts covering the stock, 24 give Home Depot a Buy or Strong Buy rating, and eight of the rest rate the stock at Hold. At a share price of around $346.80, the upside potential based on a median price target of $422.50 is 21.8%. At the high price target of $470, the upside potential is 35.5%.

Analysts expect Home Depot to report revenue of $34.83 billion for its fiscal 2022 fourth quarter that ended in January. That’s down 5.4% sequentially but up 32.7% year over year. Adjusted EPS are forecast at $3.17, down by about 19% sequentially and up by 15.7% year over year. For the full fiscal year, EPS is forecast at $15.52, up 29%, on sales of $149.99 billion, up 13.5% year over year.

Home Depot stock trades at 22.4 times expected 2022 EPS, 21.5 times estimated 2023 earnings of $16.18 and 20.1 times estimated 2024 earnings of $17.30 per share. The stock’s 52-week range is $246.59 to $420.61. Home Depot pays an annual dividend of $6.60 (yield of 1.90%). Total shareholder return for the past year is 25.5%.

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Macy’s

Shares of Macy’s Inc. (NYSE: M) have added more than 69% over the past 12 months. That includes a drop of 32% since mid-November from a six-year high. Since the COVID-19 vaccines were announced in November of 2020, Macy’s stock price has jumped by 300%. The company reports results before markets open Tuesday.

Activist investors have targeted Macy’s and rival Kohl’s recently, seeking to separate the booming e-commerce business from the mother ship. Macy’s has managed so far to dodge a slate of nominees to its board, but the company has said it is reviewing its business structure.