This week on the Estimize Roundtable, Estimize’s CEO, Leigh Drogen, and SVP of Media, Christine Short, are joined by Jeff Macke of Macke Asset Management and Spencer Jakab, Deputy Editor for Wall Street Journal’s Heard on the Street. The group discusses the current state of US retailers, and how they expect certain companies such as
Home Depot, TJX Companies, Urban Outfitters, Foot Locker, Limited Brands, Wal-Mart, Ralph Lauren, Gap and others to report this season.
Home Depot Stock Articles & Video
Home Depot continues to defy all logic. The company in its latest quarter produced an exceptional set of earnings which is bound to drive the stock higher. However, many investors are buying into its guidance and fundamentals but forgetting its valuation and inherent risks. Issues such as impending rising interest rates could adversely affect the housing market in the US. It is not a diversified company.
Home Depot fails on some fundamental metrics over a 10 year period. Its debt has risen too fast leaving little equity on the balance sheet. The price to rent ratio continues to increase in the US. This is bearish as more Americans turn to renting due to inflated home prices. Price to sales ratio is above historic averages. It will revert to its mean of 1.12 which will mean a drop in the share price.
Home Depot beat earnings estimates by $0. 07 per share in Q4 FY 2015. Macroeconomic factors such as an improving housing market brought customers through Home Depot’s Doors. Home Depot’s execution on strategies helped it set itself apart from competitors.
Home Depot beat expectations again reporting strong Q4 results. With consistent sales growth, OM improvements, and growing returns, they show no signs of slowing down on top and bottom line growth yet. With a 17% bump in quarterly dividend and strong fundamentals, Home Depot might be a good investment for these volatile markets.
Analysts expect Home Depot Q4 2015 earnings per share at $1.10. Investors should expect robust traffic and same-store sales increases. Expect Craig Menear, CEO, and his team to discuss Home Depot's navigation through the current retailing landscape on the earnings call.