What to Expect When Home Depot Reports Tuesday

Home Depot Inc. (NYSE: HD | HD Price Prediction) is scheduled to release its fiscal fourth-quarter financial results before the markets open on Tuesday. Analysts are calling for $2.11 in earnings per share (EPS) and $25.77 billion in revenue. The same period of last year reportedly had $2.25 in EPS and $26.49 billion in revenue.

In December, Home Depot issued a forecast for the next fiscal year. This forecast may be a red light for the housing markets. The nation’s largest home improvement company announced it expects revenue growth of about 3.5% to 4.0% in fiscal 2020 and comparable sales growth of about 3.5% to 4.0%. While the figures seem healthy at first, they are a downgrade from earlier comments.

Craig Menear, board chair, CEO and president, commented, “We are confident that the investments we are making in the One Home Depot experience will address the evolving needs of our customers. We are building on our distinct competitive advantages to capitalize on a large and fragmented market opportunity and extend our leadership position for years to come.” It is really not clear what that means.

Excluding Monday’s move, Home Depot stock has outperformed the broad markets with a gain of 28% in the past 52 weeks. In the past quarter alone, the share price is about 9% higher.

A few analysts weighed in on Home Depot ahead of the report:

• Morgan Stanley has an Overweight rating and a $260 price target.
• Wells Fargo has an Overweight rating with a $265 price target.
• Loop Capital rates it a Hold with a $215 price target.
• Wedbush has a Neutral rating with a $225 price target.
• JPMorgan has an Overweight rating with a $241.
• Nomura has a Hold rating.

Home Depot stock traded down about 2% at $240.44 on Monday, in a 52-week range of $179.52 to $247.36. The consensus price target is $238.93.

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