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People do not spend money on travel, entertainment and dining, and have used that money to make their homes more comfortable.
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Because the pandemic has kept everyone in their homes, many of us have become Tim “The Toolman” Taylor. Home improvement is suddenly everyone’s favorite hobby, and that has helped Home Depot.
Investors will see just how much the retailer reports on Tuesday morning on profit.
Home Depot stock (ticker: HD) has climbed more than 30% in 2020, more than six times the profits of S&P 500 in the same period.
It’s not hard to see why. Those who have been lucky enough to stay active during the pandemic do not spend money on travel, entertainment and dining, and have therefore diverted those funds to make their homes more comfortable as they hunt to spend more time there. .
In addition, the status of Home Depot as an essential retailer has not only meant that its stores can remain open, but it can benefit disproportionately, as customers consolidate their travels and spend more as they go out. That has made it one of the big-box winners of the pandemic.
Many analysts are enthusiastic about the opportunities of the stock, even without the catalyst of the pandemic to support sales.
That said, investors should be aware of high expectations. Home Depot’s year-to-date rally shows that the coronavirus – related impetus went through the market almost unnoticed.
Analysts are looking for the company to earn $ 3.68 a share on revenue of $ 34.5 billion. That compares with EPS of $ 2.08 and revenue of $ 28.3 billion in the previous quarter. Last quarter was a bottom-line miss for Home Depot, though that was due to costs. Other than that, the profit per share of Home Depot has beaten analysts’ estimates every quarter for the past five years.
Just over 60% of the 31 analysts followed FactSet rate Home Depot at Buy as the equivalent, while 35% had it at Hold. There’s a single bearish call on the Street. The average target of analytical price for Home Depot is $ 284.19, below which the stock trades.
Home Depot shares were up 2.5% to $ 287.69 close Monday afternoon. The Dow Jones Industrial Average was down 0.2%, while the S&P 500 was up 0.3%. Competitor Lowe’s (LOW), which reported on Wednesday, was up 2.2% to $ 157.71.
The company scheduled a conference call for 9 a.m. Eastern time on Tuesday.
Write to Teresa Rivas at [email protected]
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