As of April 5, Home Depot (HD) was trading at $202.06, a rise of 7.3% since its fourth-quarter earnings announcement on February 26. Also, the company was trading at a premium of 27.8% to its 52-week low of $158.09 and at a discount of 6.2% from its 52-week high of $215.43.
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In the fourth quarter, Home Depot posted adjusted EPS of $2.25, outperforming analysts’ estimate of $2.16. However, its revenue and same-store sales growth fell short of analysts’ expectations. The management team blamed unfavorable weather conditions for weak sales in the fourth quarter. Despite weak fourth-quarter sales, the stock price rose due to investors’ hopes that the United States and China are nearing a trade deal, the Fed toning down its aggressive rate hike stance, a lower unemployment rate, and wage inflation.
Home Depot’s stock has increased 17.6% this year after losing 9.3% of its share value in 2018. In comparison, peers Lowe’s (LOW) and Williams-Sonoma (WSM) have returned 24.5%, and 19.4%, respectively. The SPDR S&P Homebuilders ETF (XHB), which invests ~21.4% of its portfolio in home improvement and home furnishing companies, has returned 24.0%.