HD Stock: 3 Reasons to Be Bullish on Home Depot Inc

For the year, The Home Depot Inc. reported a profit of $5.46 per share on revenue of $88.52 billion. This translates into a sturdy 17.5% growth from last year’s comparable quarter, when it posted EPS of $0.996, and $1.38 billion in net income. Nomura raised their price target on shares of Home Depot from $130.00 to $140.00 and gave the stock a neutral rating in a report on Wednesday, December 9th. Lower gasoline prices have resulted in higher spending on home furnishings, which has bolstered the company’s top-line growth over the past three quarters of 2015. Vetr upgraded shares of Home Depot from a sell rating to a hold rating and set a $120.31 target price on the stock in a report on Thursday, October 29th.

Home Depot’s call options, usually used for bets the stock will rise, outnumber puts, which are typically used to bet on a decline, by a 1.2-to-1 margin, the highest since May 2014, according to options analytics firm Trade Alert.

Home Depot anticipates fiscal 2016 earnings between $6.12 and $6.18 per share. One analyst has rated the stock with a sell rating, seven have assigned a hold rating and fourteen have issued a buy rating to the company.

“While increasing macro concerns have emerged in recent weeks, we maintain a sanguine outlook”, Wedbush Securities said, for both Lowe’s and Home Depot (HD) earnings.

Home Depot (NYSE:HD) last issued its earnings results on Tuesday, February 23rd. Home Depot now has a consensus rating of “Buy” and a consensus target price of $136.41. Shareholders of record on Thursday, March 10th will be given a $0.69 dividend. The merger with Staples is still pending, and management said the status of the merger disrupted business during the fourth quarter.

Despite some of the best fundamentals in retail, shares have underperformed YTD (HD/LOW -9%/-11% vs. XRT -4%) as the market debates the prospects for slower growth going forward. During the same period in the previous year, the firm earned $1.00 EPS. Accredited Investors increased its stake in shares of Home Depot by 7.7% in the fourth quarter. Finally, Dearborn Partners LLC purchased a new stake in shares of Home Depot during the fourth quarter worth approximately $486,000. The Home Depot stores sell an assortment of building materials, home improvement and lawn and garden products and provide a number of services.