Home Depot’s fourth-quarter revenue and earnings, reported on Tuesday, exceeded market expectations, as client traffic rose and visitors on average spent more at its stores amid optimism in the US housing sector.
Home Depot shares closed lower for the first time in the past four trading sessions on Tuesday. The stock edged down 0.14% ($0.26) to $186.71, after touching an intraday high at $191.31, or a price level not seen since February 7th ($194.51).
In the week ended on February 18th the shares of the home improvement chain added 1.55% to their market value compared to a week ago, which marked the seventh gain out of nine weeks.
The stock has extended its loss to 7.06% so far during the current month, following a 6.00% surge in January. The latter has been a sixth consecutive month of gains.
For the entire past year, the shares of the NYSE-listed company rose 41.36% following another 1.38% surge in 2016.
Sales at Home Depot stores that are open for at least 12 months surged 7.5% year-on-year during the quarter ended on January 28th, while outstripping the median analyst estimate of a 6.5% growth.
Customer transactions were 2% more during the past quarter from a year ago, while the average check value reportedly increased 5.5%.
At the same time, Home Depot’s revenue grew 7.5% year-on-year to $23.88 billion during the fourth quarter ended on January 28th. In comparison, analysts on average had expected $23.66 billion in revenue.
The home improvement chain’s net income surged 2% year-on-year to $1.78 billion ($1.52 per share) during the fiscal fourth quarter, as growth effect was trimmed by a $127 million charge resulting from the US tax code reform.
Home Depot’s earnings per share, excluding special items, were reported at $1.69 during the latest quarter, which surpassed the median forecast by analysts pointing to earnings of $1.61 per share.
Results were in unison with the latest government report on US housing sector activity. Last Friday the US Census Bureau said housing starts in the country had increased at a monthly rate of 9.7% to an annualized level of 1.326 million in January. The latter has been the highest rate since October 2016. Single-family starts were reported to have increased 3.7% to 877 000 in January from a month ago, while the volatile multi-family segment grew 19.7% to 431 000.
Home Depot now expects a 5% growth in its comparable store sales during the current fiscal quarter. The forecast came in line with an estimate by Morgan Stanley analyst Simeon Gutman. In a note to clients he said the projection was ”a clear indication that the segment is strong and consumers are allocating their spending dollars towards home improvement.”
According to CNN Money, the 31 analysts, offering 12-month forecasts regarding Home Depot’s stock price, have a median target of $215.00, with a high estimate of $240.00 and a low estimate of $158.00. The median estimate is a 15.15% surge compared to the closing price of $186.71 on February 20th.
The same media also reported that 20 out of 33 surveyed investment analysts had rated Home Depot’s stock as “Buy”, while 10 – as “Hold”.
Daily and Weekly Pivot Levels
With the help of the Camarilla calculation method, todays levels of importance for the Home Depot stock are presented as follows:
R1 – $187.17
R2 – $187.63
R3 (Range Resistance – Sell) – $188.09
R4 (Long Breakout) – $189.46
R5 (Breakout Target 1) – $191.07
R6 (Breakout Target 2) – $191.72
S1 – $186.25
S2 – $185.79
S3 (Range Support – Buy) – $185.34
S4 (Short Breakout) – $183.96
S5 (Breakout Target 1) – $182.35
S6 (Breakout Target 2) – $181.70
By using the traditional method of calculation, the weekly levels of importance for Home Depot Inc (HD) are presented as follows:
Central Pivot Point – $185.28
R1 – $189.68
R2 – $192.38
R3 – $196.78
R4 – $201.17
S1 – $182.58
S2 – $178.18
S3 – $175.48
S4 – $172.77
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