Home Depot (HD) has again driven the strong US housing recovery to great financial success, while the Target (TGT), J. C. Penney (JCP), Macy’s (M), and its likes underwent disastrous seasons.
On Tuesday, Home Depot reported huge earnings, beating the expectations of analysts and delivering Q4 earnings of $1.44 per share as against the $1.33 of analysts’ expectations. The same-store sales climbed a whopping 5.8-percent, exceeding the estimates of Wall Street by posting 3.5% rise. The same-store sales of Home Depot climbed by 6.2-percent, probably assisted by the constant demand for appliances from consumers and building raw materials from the contractors.
The home improvement retailer is about evenly mixed during the sessions, reversing course or cutting back in the subsequent regular sessions following 24 of the previous 48 premarket earnings events that were tracked.
Delving further into its performance data, Home Depot is favoring the short and long side in adding further to it pre-market profits and drops in the consequent regular session. Totally, 48 quarters were tracked out of which the stock reported a pre-market advance in 33 quarters. In 17 out of these quarters, the stock has gained 52-percent of the time in the consequent regular sessions. On the flipside, Home Depot is in favor of the short side, reporting fifteen quarters where it has experienced an earnings-driven premarket drop, thus adding nine times to its profits or 60-percent of the time.
Home Depot increased its quarterly dividend by 29-percent and passed a fresh $15 billion share re-buy program. The company, for 2017, sees $7.13 per share earnings, which is a little below the forecasts of analysts ($7.17). The growth of same-store sales is likely to cool a little when compared to the previous year to 4.6-percent increase.
In Tuesday’s pre-market trading, shares climbed to $148 indicating an increase of 3.3%.
In spite of the post-election increase in the rates of mortgage, which has made purchasing a home costlier, the backdrop is favorable for companies like Home Depot associated with the US housing recovery. The values of homes are still increasing, and the job market is doing well, which is urging people to spend on home re-modeling projects.
As per the National Association of Retailers (NAR), the national average for home prices in the Q4 was up 5.7-percent from a year back at $235,000. During the Q4, a single-family home’s average sales price rose in 158 metropolitan areas out of 178. In other words, it increased in around 90-percent of these markets.