Shares of Home Depot Inc (NYSE:HD) edged higher in early trading on Tuesday, after the company reported its first-quarter (Q1) results on Monday.
Here are the key analyst insights:
- Goldman Sachs analyst Kate McShane reiterated a Buy rating and price target of $409.
- JPMorgan analyst Christopher Horvers reiterated an Overweight rating on the stock.
Check out other analyst stock ratings.
Goldman Sachs: Home Depot's net sales grew 4.8% year-on-year to $41.8 billion, while adjusted earnings came in at $3.43 per share, with both figures topping consensus estimates of $41.5 billion and $3.41 per share, respectively, McShane said in a note.
She added the quarter's misses:
- Comparable sales grew 0.6% year-on-year but missed the consensus estimate of 0.8%
- Average ticket rose 2.2% year-on-year, decelerating from the previous quarter's 2.4%
- Transactions declined by 1.3% year-on-year
- Operating margin contracted by 89 basis points (bps) year-on-year to 12.3%
- Gross margin shrunk 77 bps to 33.0%
The analyst mentioned that management reiterated their full-year guidance, including:
- Sales growth between 2.5% and 4.5%
- Comparable sales growth between flat to up 2%
- Gross margin of around 33.1%
- Adjusted earnings growth is between flat to 4.0%
JPMorgan: Home Depot reported earnings of $3.43 per share, topping Street expectations of $3.41 per share, despite a tax headwind of 3 cents per share, Horvers said. U.S. comps of 0.4% missed the consensus of 0.5%, although forex added 55 basis points (bps) to total comps, he added.
While the company believes weather was "a net headwind" in the quarter, its performance may improve in the second quarter, the analyst stated.
He added that these results suggest that Lowe’s Companies Inc (NYSE:LOW), which is scheduled to report its quarterly results on Wednesday, would report a beat, with comps of 1.4% versus the Street’s 0.7% expectation.
Price Action
Shares of Home Depot had risen by 0.28% to $300.61 at the time of publication on Tuesday.
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