Buy Home Depot Inc (NYSE:HD) Before Q3 Results

Home Depot Inc (NYSE:HD) will announce third quarter results next week. Analysts expect the company to beat Wall Street expectations. Home Depot’s sales got a boost in the quarter following multiple hurricanes in the US, after which people flocked to the home improvement company’s stores to buy equipment to fix their damaged homes.

Home Depot Inc (NYSE:HD) remains one of the very few “Amazon Proof” stocks. Earlier this year. Amazon announced a partnership with Sears after which Sears will sell its Kenmore home appliances on Amazon. This caused some concerns with Home Depot Inc (NYSE:HD) shareholders. But analysts think that a small product line cannot make much of a difference for Home Depot. Home Depot is experiencing rising comp sales amid an increase in home renovation activity in the US. According to Harvard University’s Joint Center for Housing Studies, people in the US are expected to spend a whopping $316 billion on house renovations and remodeling, compared to $296 billion in 2016. In August, Home Depot raised its full year guidance after reporting second quarter results. This was the second time the company increased its full year guidance.

Home Depot Inc (NYSE:HD) is also focusing on improving its digital game. In the second quarter, online sales increased by over 23%. Online sales now account for over 6% of the total revenue. Home Depot is investing heavily in content development, website improvements and online experience. It now has a “Pro” program on its website where customers can get products deliver to them within 2 hours.

Home depot’s margins also remain healthy. In the second quarter, gross margin came in at 33.7%, while EBITDA totaled to 17.7%, compared to the gross margin of 33.7% and EBITDA of 17.2% reported in the second quarter of last year.

KeyBanc Capital Markets’ Bradley Thomas recently said in a report that Home Depot Inc (NYSE:HD) is delivering consistent execution, healthy growth and robust financial results. The analyst expects the company to keep reporting strong same-store sales and return on investment. In October, market research firm Gordon Haskett initiated coverage of Home Depot stock with a “Buy” rating and a price target of $189.

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