24/7 Wall St.

Home Depot Inc. (NYSE: HD) is scheduled to report its fiscal third-quarter financial results before the markets open on Tuesday. The consensus estimates from Thomson Reuters call for $1.32 in earnings per share (EPS) on revenue of $21.76 billion. In the same period of the previous year, the specialty retailer posted EPS of $1.11 and $20.52 billion in revenue.

This company remains the undisputed leader in the home improvement retail category. It has 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2014, Home Depot had sales of $83.2 billion and earnings of $6.3 billion. It employs more than 370,000 associates.

With an expected mild winter on tap due to the El Niño effect, some people think that can be a benefit to Home Depot and other home improvement companies. In addition, the continued strength in the housing market also could bode well for the company. EPS gains have been consistently in the 15% to 20% range, and a consensus of analysts forecasts earning increases to continue to grow at about 15% annually for another two to three years.

We recently reported that Home Depot found its footing again in retail for a mix between home improvement for consumers and for construction materials for builders. After two years of big dividend hikes, 24/7 Wall St. has two observations about the home improvement retail giant’s future of dividends. The first is that dividend growth is likely to become more modest, but the second is that Home Depot’s dividends could likely grow quite nicely for another decade.

Ahead of the earnings report, a few analysts weighed in on Home Depot:

• Oppenheimer reiterated an Outperform rating with a $133 price target.
• Citigroup has a Buy rating and raised its target to $140 from $133.
• S&P Equity Research reiterated a Hold rating with a $130 price target.
• BMO Capital Markets has an Outperform rating and raised its target to $135 from $132.

So far in 2015, Home Depot has outperformed the market, with the stock up just over 16%. Over the past 52 weeks, the stock is up nearly 24%.

Shares of Home Depot were trading at $119.93 on Monday, with a consensus analyst price target of $131.48 and a 52-week trading range of $92.17 to $126.12.

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