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Why Home Depot Is Trading Close to Its 52-Week High

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Why Home Depot Is Trading Close to Its 52-Week High PART 1 OF 3

Why Home Depot Is Trading Close to Its 52-Week High

Stock performance

On October 5, 2017, Home Depot (HD) hit a new 52-week high of $166.25 and closed the day at $166.12, which represents growth of 7.7% since the announcement of 2Q17 earnings on August 15, 2017.

Why Home Depot Is Trading Close to Its 52-Week High

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The strong 2Q17 earnings and the expectation of growth in sales due to recovery efforts after Hurricane Harvey and Hurricane Irma appear to have increased investors’ confidence, leading to a rise in Home Depot’s stock price.

In 2Q17, the company posted adjusted EPS (earnings per share) of $2.25 on revenues of $28.1 billion. Analysts had projected the company would post EPS of $2.22 on revenues of $27.8 billion. After posting strong 2Q17 earnings, the company’s management raised its 2017 EPS guidance from $7.15 to $7.29.

For a more detailed analysis of Home Depot’s 2Q17 earnings, you can read Home Depot’s Strong 2Q17 Earnings Still Have Investors Wary.

Year-to-date performance

2017 has been a good year for Home Depot. Since the beginning of 2017, the company’s stock price has risen 12.9%. Peers Lowe’s Companies (LOW), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY) have returned 15.7%, 6.0%, and 42.8%, respectively, year-to-date.

During the same period, the S&P 500 Index (SPX) and the SPDR S&P Homebuilders ETF (XHB) have returned 14.0% and 19.5%, respectively.

Series overview

In this series, we’ll look at the management’s 2017 guidance and analysts’ EPS estimates for the next four quarters. We’ll wrap up the series by looking at the company’s valuation multiple and analysts’ target price.

Next, we’ll look at analysts’ EPS estimates for the next four quarters.

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