Home Depot share price was up by 1.6 percent in pre-market trading on Tuesday, trading at $414.85. The company released forecast-beating earnings on Monday, and gave a strong guidance for the coming year. Its shares now stand at 18.6 percent in year-to-date gains, which puts it behind rival company, Lowe’s, which has risen by 24 percent this year.
In the fiscal third quarter ending October, Home Depot (NYSE: HD) reported revenues of $40.22 billion, up by 6.6 percent above the corresponding quarter last year. In addition, that figure beat analysts’ forecast figure of $39.32 billion. However, its earnings per share (EPS) was at $3.78, down by 1.8 percent YoY. Also, Comparable Sales declined by 1.3 percent, signifying the company’s struggle to increase sales.
Notably, the improved revenue was attributable, to weather-related purchases, notably during the hurricane season. Also, the company’s acquisition of SRS Distribution seems to have paid off. Acquired in May, SRS is expected to bring in $6.4 billion in revenue for the full year, corresponding to an overall YoY revenue jump of 4 percent.
Meanwhile, Home Depot projects that sales will decline by 2.5 percent in full-year sales, down from the previous guidance of 3%-4% drop. A key concern remains the drop in average sales per trip, which dropped by 0.8 percent to $88.65 in the quarter under review. This will likely put a lid on Home Depot stock upside.
Home Depot share price pivots at 409.68, and the momentum indicators signals a likely continuation of the upside. That will likely meet the first resistance at 412.32, but extended control by the buyers could break above that level to test 414.30.
On the other hand, moving below 409.68 will signal control by the sellers. In that case, the first support is likely to come at 407.36. However, if the sellers extend their control, it could break below that level and invalidate the upside narrative. Also, the downward momentum could test 405.90.
This post was last modified on Nov 12, 2024, 15:24 GMT 15:24