Is Home Depot Building a Bullish Stance on Housing?
The housing market has been a complete disaster over the past few years. Several factors contributed to a property bubble that eventually popped and left home-buyers scratching their heads. Many stocks related to housing crashed to unprecedented levels. However, one popular name believes the industry is finally on the road to recovery and continues to see its stock price climb higher.
On Tuesday, The Home Depot (NYSE:HD) announced impressive financial results for the third quarter. The world’s largest home improvement specialty retailer earned $947 million (63 cents per share), compared to $934 million (60 cents per share) a year earlier. Excluding items such as charges related to closing stores in China, the company earned 74 cents per share, beating estimates of 70 cents per share. Home Depot has now surprised to the upside in seven of the past eight quarters, with the one exception being this year’s first quarter that came inline with estimates.
In perhaps one of the most under the radar statements regarding housing, Home Depot believes that the industry has seen the worst and is starting to improve. Frank Blake, chairman and chief executive officer, explains, “Our third quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market.” In the past, the company has remained quite neutral on the overall housing market.
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