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Non-Tech : Home Depot (HD) -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (96)	2/24/1998 12:57:00 PM
From: Xpiderman	Read Replies (2) \| Respond to of 1169

I think HD is fairly overvalued to slightly over-valued here after today's drop. From today's earning report, "For the 13-week fourth quarter of fiscal 1997, net earnings were $307 million ($0.41 diluted earnings per share), up 22% from net earnings of $251 million ($0.34 diluted earnings per share) in the 14-week fourth quarter of fiscal 1996. Sales for the fourth quarter of fiscal 1997 increased 16% to $5.731 billion from $4.959 billion in the fourth quarter of fiscal 1996. Comparable store sales rose 6% from the fourth quarter of fiscal 1996. " Notice the difference between these two 4th quarters? There were 14 weeks in FY96 Q4, and only 13 weeks in FY97 Q4. If I recalculate Q4 1996 based on 13 weeks, the number became: $251(13/14) = $233 (Million). The base on the normalized number, the earning growth is actually [(307/233)-1]100% = 31.8% instead of 27% reported. The current Consensus Estimates for next Year is $2.02, so 66/2.02 = 32.7, indicating the HD stock is fair valued to slightly over valued.