Home Depot’s (HD) Q1 results on May 14 will likely be “largely in line” with market expectations and the retailer will likely also reaffirm its “conservative” 2024 guidance, Wedbush said in a note to clients on Friday.
“While we initially viewed the company’s 2024 guidance as conservative, we now see it as realistic given choppy sales trends partly driven by a delayed spring, increasing mortgage rates and a further-delayed housing recovery,” said Wedbush analysts including Seth Basham.
However, the investment firm sees the retailer delivering a quarter-on-quarter improvement in comps to about -2%, which is in line with Wall Street estimates, and would be better than the -3.5% in Q4.
Wedbush also sees Home Depot’s Q1 gross margins at 34.2% compared with consensus estimates at 34%, with “the slight upside driven by permanent cost cuts and reductions in product and transportation costs.”
“All in, we see slight upside potential to consensus’ $3.59 EPS estimate for 1Q24, but expect no change to FY24 EPS guidance of ~$15.45,” the analysts said.
Wedbush has an outperform rating and $410 price target on Home Depot.