The home building have continued lower and HD failed to rally despite raising guidance and beating their estimate. By the way, they serially raise guidance. The fact of the matter is that HD is a cyclical and management really can't forecast accurately so they forecast conservatively. In each of the past two recessions, HD fell to 10 times and are forecasted to go from $3.60 this year to $4.25 next year. When growth gets hot, it can rally to 20 times and you can see it made it pretty close to 20 times the $4.25 estimate (source: Value Line).
Stop loss 79-80. Target 70-68. Last 74.59
Tim 10:36AM EST, August 30, 2013