How Low Will Home Depot’s Price Go If Revenue Growth Stalls
Home Depot (NYSE:HD) has reported solid results through the first three quarters of the year, reaffirming its guidance of 6.3% sales growth and 4.9% comp sales growth for 2016, and now expects full-year EPS to grow 15.9% to $6.33, up from the estimate of $6.31 after Q2, estimate of $6.27 after Q1, and estimate of $6.12-$6.18 after 2015 full-year results announcements. On the other hand, its chief competitor Lowe’s adjusted its previous estimate of 10% top line growth in 2016 to a 9-10% growth estimate, and adjusted its estimate of comp sales growth to 3-4% for 2016, down from an earlier estimate of 4% comp growth, after weaker-than-expected Q3 results.
While Home Depot has enjoyed strong growth, consumer spending on home improvement could grow moderately, stalling revenue growth at Home Depot. As can be seen from our scenario chart, a 3% growth rate through 2016-2021 will see the price estimate of the company fall by approximately 10%.
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Have more questions on Home Depot? See the links below.
- Optimistic Revenue Growth Expectation Through 2021 Will See Home Depot’s Value Rise >10%
- Why Home Depot Is Doing Better Than Lowe’s In 2016
- How Home Depot Will Gain From The Low Inventory Of Homes For Sale
- Home Depot Has Been Operating Efficiently In The Last Few Years, And Here’s Why
- Home Depot Or Lowe’s — Which Retailer Is Doing Better In 2016?
- Home Depot Vs. Lowe’s – Who Is Better At Inventory Management?
- Home Depot Beats Consensus Estimates And The Trend Of Declining Sales For Retailers In Q1
- Where Will Home Depot’s Revenue And EBITDA Growth Come From Over The Next Three Years?
- How Has Home Depot’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What’s Home Depot’s Fundamental Value Based On Expected 2016 Results?
- What Is Home Depot’s Revenue And EBITDA Breakdown?
- By What Percentage Have Home Depot’s Revenues And EBITDA Grown Over The Last Five Years?
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