Diamonds and Dogs

8/20/19

Home Depot (HD) continues to impress. The big box home improvement retailer is up 4%, it's best day of the year, not far from a 52-week high following earnings. Home Depot beat by 9 cents as revenue rose 1.2% to $30.84 billion. Home Depot cut full-year comparable-store sales, which was expected amid lumber price deflation and tariffs. Investors seem pleased that U.S. comparable store sales were as good as they were, and the company was able to maintain its annual earnings target. Home Depot plans to spend $2.5 billion on buybacks in the second half of the year. Morgan Stanley maintained an overweight with a price target of $210.

TJX (TJX) at a discount. The discount retailer is down 3% to a three-month low following earnings. Earnings were in line as sales rose 4.8% to $9.78 billion, but the company lowered guidance for the third quarter.  The 2% comparable-sales gain was below the 3.1% consensus and TJX's top line also failed to meet analysts' expectations. The tepid guidance is giving investors a reason to sell. TJX was up over 15% year to date through Monday, slightly trailing the S&P 500 's 16.6% gain but easily ahead of its peers tracked by the SPDR S&P Retail ETF.