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Yahoo
a day ago
- Business
- Yahoo
Dear Home Depot Stock Fans, Mark Your Calendars for August 19
Earnings day is not just about tallying sales and profits, but also when management rolls out the game plan for what's next. Next Tuesday is no ordinary day for Home Depot (HD) fans. On Aug. 19, the home improvement giant will release its second-quarter numbers before the opening bell, and Wall Street will be all ears. With high interest rates, slow housing turnover, and picky consumers shaping the market, this report carries the kind of weight that can set the tone for months ahead. Standing tall in U.S. retail, investors want to see whether Home Depot's Pro segment push, SRS Distribution acquisition, and tech-driven store upgrades are delivering the growth story they have been promised. More News from Barchart Why This Cannabis Penny Stock Could Be Wall Street's Next Meme Trade Breakout Apple Stock Is Gaining Momentum, Is AAPL Stock a Buy? Peter Thiel-Backed Bullish Is About to IPO. Should You Buy BLSH Stock? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Straddling both DIY shoppers and big-league contractors, Home Depot's Q2 report could either reinforce its resilience or spark fresh questions. It's like a litmus test for how well Home Depot is navigating margin pressures and softer demand for big-ticket remodeling. Consider it as the halftime talk in a long, competitive season. About Home Depot Stock Founded in 1978 and based in Atlanta, Georgia, Home Depot is the world's largest home improvement specialty retailer — a one-stop powerhouse for DIYers and professionals alike. With more than 2,350 retail stores, it serves customers across all 50 states, D.C., Puerto Rico, the U.S. Virgin Islands, Guam, Canada, and Mexico. Built on scale, supply-chain strength, and a growing Pro segment, the company continues to shape the home improvement market with innovation and reach that few can match. Valued at a market capitalization of $405 billion, shares of HD stock have swung with notable momentum over the past year. HD stock has risen 13% over the past 52 weeks, peaking at $439.37 back in November. The stock faced pressure earlier this year, dipping to a year-to-date (YTD) low of $326.31 in April. Since then, though, HD stock has staged a solid rebound, climbing nearly 23%. Home Depot's Mixed Q1 Earnings Report On May 20, before Wall Street even had its first cup of coffee, Home Depot rolled out its fiscal 2025 Q1 earnings results. The world's largest home improvement retailer posted net sales of $39.9 billion, up 9.4% year-over-year (YOY) and ahead of projections. But it was not a clean sweep. Adjusted EPS slipped 3% annually to $3.56, missing analyst expectations. Comparable sales dipped 0.3% overall, although U.S. comparable sales eked out a 0.2% gain. Currency headwinds shaved about 70 basis points off total company comparable sales. Meanwhile, the balance sheet showed $1.4 billion in cash, $61.3 billion in adjusted debt, and $8 billion in shareholder equity. Operating cash flow hit $4.3 billion. Management credited the results to steady demand in smaller projects and successful spring events, timed perfectly as the season kicked off across the country. Looking ahead, Home Depot is betting big on its strategy — sharpening its interconnected retail experience, expanding Pro customer offerings, and widening its store footprint. The SRS Distribution acquisition, tech investments, and 'pro wallet' ecosystem are all part of the plan to lock in market share in a still-resilient home improvement sector. For fiscal 2025, the home improvement retailer expects sales growth of 2.8% and comparable sales to climb 1%. Gross margin is pegged at 33.4%, with an adjusted operating margin of 13.4%. The management also anticipates 13 new store openings. Meanwhile, adjusted EPS is anticipated to slip 2% YOY, and capital expenditures are set at 2.5% of sales. Even so, management's tone was upbeat, confident that its scale, supply-chain muscle, and customer ecosystem can weather near-term headwinds and position the company for long-term growth. For the Q2 report next Tuesday, analysts tracking Home Depot anticipate Q2 revenue to rise to $45.4 billion, with adjusted EPS rising marginally YOY to $4.71. Looking further ahead, fiscal 2025 EPS anticipated to dip 1.4% YOY to $15.03, before rising by another 9.4% annually to $16.44 in fiscal 2026. Tariffs, Pricing, and the Bigger Picture Home Depot CFO Richard McPhail has made it clear that, despite rising tariffs, the company plans to hold pricing steady across its portfolio. The reasoning is scale, deep supplier relationships, and years of diversifying imports — so much so that, by next year, no single foreign country will account for more than 10% of purchases. With over half of its sales sourced domestically, Home Depot is better positioned than some of its rivals, which signals price hikes could be coming. Management framed tariffs as a competitive opening, a chance for both the company and its suppliers to grab market share. Still, CEO Ted Decker acknowledged the drag from 'stubbornly high' interest rates and economic uncertainty, which have cooled big-ticket remodels. Customers are sticking to paint cans and garden tools for now, but the long game is all about staying ready for when bigger projects come back. What Do Analysts Expect for Home Depot Stock? Analysts are upbeat about Home Depot stock's potential. Of the 34 analysts covering shares, the overall rating is a 'Strong Buy,' an upgrade from an overall 'Moderate Buy' rating three months ago. The current bullish rating is based on 25 analysts advising a 'Strong Buy,' while one sticks to a 'Moderate Buy" rating. Seven more analysts are staying on the sidelines with a 'Hold' rating, while one analyst is waving a red flag with a 'Strong Sell." The mean price target of $423.67 hints at 6% upside potential from where HD stock trades now. The Street-high target of $475 implies that shares could rally as much as 19% from here. Final Thoughts on Home Depot The home improvement industry is navigating a tricky patch right now. High interest rates, cautious consumers, and tariff pressures are testing the waters. Home Depot's upcoming Q2 report will be the spotlight moment, showing whether the company's scale and strategy can overcome these headwinds and keep the growth engine humming in a softening market. On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
01-06-2025
- Automotive
- Yahoo
Should You Buy Ford While It's Below $11?
Ford's low ROIC, coupled with the intensely competitive nature of the auto industry, likely means that it does not possess an economic moat. A bright spot for the company is the Pro segment, which is driving revenue and profit growth. Investors might be drawn to the cheap valuation and the high dividend yield. 10 stocks we like better than Ford Motor Company › It might come as a surprise to investors, but Ford (NYSE: F) is outperforming the broader market this year. As of May 28, the stock is up nearly 3% in 2025. This small win doesn't take away from the fact that the company has a poor track record over an extended period of time. Nonetheless, it's best to view the situation with a fresh perspective. Ford shares currently trade below $11. Does this setup mean that you should be a buyer right now? Let's look at the most important factors about the business and the stock that long-term investors should be paying attention to. In my view, one of the first things investors should try to identify when looking at a potential stock to buy is the presence of an economic moat. Capitalism creates fierce competition. And the companies that have built up durable competitive strengths are able to outperform rivals in the long run. Even the legendary investor Warren Buffett would likely agree. Turning the attention back to Ford, it's an easy argument to make by saying the company does not have an economic moat. A quantitative representation can be had by looking at the return on invested capital (ROIC) of 8.6%. It's best to own businesses that generate a figure well over 20%, as this indicates a huge spread between ROIC and the weighted average cost of capital. Producing a much higher ROIC showcases the ability to create real economic value, as opposed to destroying it. Understanding the industry backdrop will also give investors pause. The market is incredibly competitive, with domestic and foreign auto makers vying for consumer wallet share. The rise of electric vehicle (EV) enterprises only complicates the landscape. Some consumers might have an affinity to a brand, but other factors like price, features, and reliability can matter more in certain circumstances. It's hard to gain any sustainable advantage over rivals. Ford has been around for over a century, a nod to its staying power. However, this also reveals just how mature the auto industry is. Yes, there has been some innovation in recent decades with the introduction of hybrid cars and EVs. But the overall industry's growth isn't anything to write home about. In 2024, Ford brought in $185 billion in total revenue. This is just 28% higher than exactly one decade earlier in 2014. There were 17.8 million cars sold in the U.S. in April on a seasonally adjusted annual rate. That number is the same as exactly 25 years ago. The takeaway is that investors shouldn't expect Ford to miraculously start to supercharge its unit growth in the years ahead, unless, of course, there is a surge in the global population that warrants the need for more vehicles being on the road. I wouldn't bet on it. There is one bright spot under Food's hood, though, which is the Pro segment. This commercial-focused operation put up 15% sales growth in 2024, with an operating margin of 13.5%. Management touts its ability to bring in recurring revenue for the business. At under $11 per share, investors might be drawn to the current valuation. The stock trades at a price-to-earnings (P/E) ratio of 8.1, which is a massive discount to the overall market. Consequently, investors can get a dividend yield of 5.9%. As enticing as that sounds, Ford typically won't command a multiple that's in line with the market just because of how capital-intensive and cyclical the company's operations are. And that dividend payout could take a hit in an economic downturn if revenue and earnings plummet. Ford is a stock that long-term investors should avoid. Before you buy stock in Ford Motor Company, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ford Motor Company wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Buy Ford While It's Below $11? was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Lowe's Pro Sales Rise as Outlook Holds
Lowe's Companies (NYSE:LOW) delivered Q1 2025 results on May 21, 2025, posting sales in line with guidance amid challenging DIY spending and adverse weather effects. Key highlights include resilient Pro segment growth, strengthened online sales (+6%), gross margin expanded by 19 basis points, and an affirmed full-year sales outlook of $83.5-$84.5 billion for FY2025. The ADG acquisition and technology investments represent major strategic actions affecting long-term positioning. Pro Segment Expansion and Strategic ADG Acquisition Pro sales delivered mid-single-digit growth, bucking headwinds in discretionary DIY projects, while Lowe's announced the $1.325 billion acquisition of Artisan Design Group (ADG) with expected closure in Q2 FY2025. The deal brings exposure to a fragmented $50 billion market adjacent to Lowe's traditional retail business and targets deeper share among homebuilders and property managers. ADG generated $1.8 billion in sales in 2024 and is on track to be EPS accretive in FY2026 following the closing. Lowe's is sharpening its focus on professional markets and securing a foothold in new home construction cycles, directly linking the company to long-term housing demand fundamentals. "We announced a deal in April 2025 to acquire Artisan Design Group or ADG, which is a leading provider of design distribution and installation services for interior, surface finishes including flooring, countertops, and cabinets. ADG serves national, regional, and local home builders as well as property managers. We expect this acquisition to increase our penetration of pro plan spend and will position us to gain share in a highly fragmented $50 billion market. And with an estimated 18 million homes needed in the US by 2033, new home construction is expected to be a major driver of pro plan spend over the next decade." -- Marvin Ellison, Chairman and Chief Executive Officer Digital Transformation and Marketplace Initiative Online sales increased 6% in the first quarter, propelled by improved traffic and higher conversion rates, with further scaling anticipated via partnerships with technology providers such as Miracle -- the leading marketplace platform. The company remains in the early stages of deploying its third-party home improvement marketplace, giving Lowe's the ability to broaden SKUs and offer value/premium product mixes without inventory risk or major fulfillment investment. This initiative enhances product breadth and mitigates capital intensity, bolstering competitive positioning against e-commerce and omnichannel rivals while supporting margin resilience. "Through Miracle, trusted marketplace sellers will be able to easily manage their catalogs on This will add new product categories across the home, and offer DIY and pro customers a full spectrum of value and premium product. Can accomplish all of this without having to carry the inventory or invest in new fulfillment centers. As we scale our new product marketplace and unlock its potential, I look forward to keeping you updated on our continuing efforts. To drive online growth." -- Marvin Ellison, Chairman and Chief Executive Officer Global Sourcing Diversification and Tariff Risk Mitigation Sixty percent of purchases are sourced domestically on an annual basis, with China now comprising approximately 20% after focused multi-year diversification efforts that included both direct and indirect procurement channels. Current supply chain strategy actively seeks to further reduce China exposure and employs robust supplier relationships, advanced pricing tools, and portfolio management to safeguard against tariff-induced cost volatility. "Over the past several years, we've been partnering with our private and national brand suppliers to diversify our global sourcing efforts. As a result, approximately 20% of our purchase volume is currently concentrated in China. Although we're pleased with this reduced dependency, we're not satisfied. And we're working to accelerate our diversification efforts. Our global sourcing team has identified exciting diversification opportunities in the US and around the globe we're actively pursuing." -- Marvin Ellison, Chairman and Chief Executive Officer Proactive supply chain risk management supports margin stability in the face of geopolitical and trade-related uncertainties, reinforcing Lowe's ability to deliver value even as tariff headwinds shift across product categories. Looking Ahead Management reaffirmed FY2025 sales guidance of $83.5-$84.5 billion, with comparable sales expected to range from flat to up 1%, operating margin forecasted at 12.3%-12.4%, and diluted EPS outlook of $12.15-$12.40. Capital expenditures are projected at $2.5 billion, including new store builds, and adjusted debt/EBITDAR stands at 2.99x at the end of Q1 FY2025. Guidance does not incorporate potential impacts from the pending ADG acquisition, which is expected to close in Q2 FY2025 and become EPS accretive in FY2026. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 975%* — a market-crushing outperformance compared to 172% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of May 19, 2025
