Home Depot, Inc. (NYSE: HD) is an organization that has practical experience in selling home improvement items and building materials, including grass and nursery items, and stylistic layout items. The worth of HD stocks has been declining recently because of fluctuations in mortgage rates and treasury yields.
According to the Home Mortgage News Daily, the normal rate for a 30-year fixed home loan flooded to 7.72%, making it harder for those who find it challenging to buy a new property.
How Home Depot is suffering from the Mortgage Crisis?
This trend poses a significant challenge for Home Depot, whose operations are highly dependent on the housing industry. Home improvements and move-ins are often interconnected. Therefore, the company’s sales and profits are expected to decline this year, as previously anticipated by investors.
Unfortunately, the recent quarterly results confirm the negative forecasters’ predictions. The company’s revenue has continuously declined over the last two quarters, without sacrificing its margins. The revenue during the 2nd quarter ended in April declined to 4.24% as compared to last year’s same quarter.
Meanwhile, the following quarter, July 2023 saw a revenue decline of 2%. In addition to this, the net income fell even harder due to the inflated operating costs in these 6 months. This decline has impacted the net profit, earnings per share, and returns on equity.
Surprisingly Optimistic Management
Ted Decker, who serves as the chair, president, and CEO, expressed his satisfaction with their performance during the second quarter. He acknowledged the strength observed in categories associated with smaller projects but also noted the continued pressure in certain big-ticket, discretionary categories.
Despite a lot going on with the Fed and rates, Ted stays hopeful about the medium-to-long haul standpoint for home improvement and the possibility of developing a piece of the pie. He also recognized the outstanding job done by the associates in delivering value and service for their customers throughout the quarter.
Technical Analysis and Prediction of HD Stock Price
The HD stock price broke an uptrend after the bears reclaimed the resistance level of $332 at the start of September this year. The bulls, however, also seem to show dominance at the support level of $288 as the RSI also went into an oversold zone. Currently, on the longer horizon, the stock is in consolidation with the 50-day EMA at $298 and 150-day EMA at $304.
Conclusion
Due to some alterations in the mortgage rates and risk-free rates, Home Depot, Inc. (NYSE: HD) has encountered a sales decline. The company’s stock price has also experienced a decline due to these fundamental changes. However, the bulls are actively trying to regain the support level, and the market prediction is bullish.
Technical Levels
Support Levels: $288 and $267
Resistance Levels: $332 and $361
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks or related indexes comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/11/11/hd-stock-price-mortgage-crisis-provoke-the-bears-in-the-market/