The Home Depot Stock Price and Forecast: Home Depot (HD) earnings beats on top and bottom lines

Update: Home Depot announced earnings before the open with a strong beat on the top and bottom lines. Earnings per shares came in at $3.92 versus the $3.40 forecast, and revenue was $36.8 billion versus the forecast of $34.96 billion. The shares initially spiked up over 1% on the release but have since retraced. The latest Home Depot (HD) stock quote is $371.62, a small gain of 0.15%. 

The Home Depot (HD) earnings will be out before the open on Tuesday along with those of Walmart (WMT). They will be closely watched for signs of how healthy US consumer spending is. The stock market looked a bit cagey on Monday as higher yields hit tech stocks, and now at the tail end of the earnings season we get some key last minute barometers of the economy. 

Home Depot (HD) stock news

We do not have an exact time for the earnings release, but it is due before the market opens. The post-earnings conference call is scheduled for 9am EST/2pm GMT so that should give a fairly close indication of when earnings will drop. The link for the conference call can be found here.  Q3 adjusted earnings per share (EPS) is expected to come in at $3.40, while revenue is expected to reach $34.96 billion, an increase of 4.3% from the same period last year. Reuters notes that HD has matched or beaten estimates for every quarter back to 2016 with the exception of the pandemic's  Q1 2020. 

The usual focus will be on supply chain issues and input costs and whether these can be passed on to consumers. Supply chain issues have seen Walmart, Home Depot and others charter their own ships to deal with supply chain slowdowns caused by the pandemic. While container prices have dropped recently, they are still well above 2020 levels and are a significant cost for retailers.

HD stock's dividend yield is currently about 1.8%, and investors will look for any change in this. Given the slowing sales figures, we do not anticipate a change.

Piper Sandler has put through a modest price target increase for HD stock ahead of the earnings report, bumping its target up from $320 to $325. 

Home Depot (HD) stock forecast

In our view, this one is set up for a disappointment. Home Depot stock has rallied sharply into the number, and usually it is a case of "buy the rumour, sell the fact" when that happens. The stock sits at record highs. Below $365 there is a volume vacuum, so a break here could see a sharp move to $330. Strong support then from $330 to $320 with a high volume profile and the 200-day moving average just at $320. 

HD 1-day chart