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The Home Depot Inc. Growth Despite Poor Analyst Forecasts

11/18/2022 2:51 PM

Shares of The Home Depot Inc., the world's largest home improvement company, are on a corrective trend at 310.00.

The third quarter financial report was released this week and was weak, with revenue of 38.9B dollars, down from 43.79B dollars a quarter earlier, and earnings per share of 4.24 dollars, down from 5.05 dollars. Against this background, leading experts do not expect significant positive dynamics in the fourth quarter, and analysts at investment bank Raymond James Financial have already downgraded the company's rating to In line with the market from Outperform amid poor forecasts for the poor growth of the national real estate market.

The corporation expects earnings at the end of the year in the range of 16.15–16.46 dollars per share. Despite a 4.3% drop in the total number of transactions with clients in the quarter, the average ticket rose by 8.8%, which fully offset the negative dynamics, and now net income could reach 4.34B dollars.

A decision on dividends has not yet been made, but according to preliminary estimates, payments will remain at 1.9 dollars per share, corresponding to 2.60% per annum.

On the daily chart, the asset continues to correct within the global sideways trend and is rising toward the local high in mid-August.

Technical indicators maintain a stable buy signal: fast EMAs on the Alligator indicator actively move away from the signal line, and the AO oscillator histogram forms rising bars above the transition level.

Support levels: 304.00, 286.00. | Resistance levels: 316.00, 338.00.

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