HD Supply (HDS) Shares Gap Up Following Earnings Beat

HD Supply Holdings Inc (NASDAQ:HDS) shares gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $33.98, but opened at $36.49. HD Supply shares last traded at $38.80, with a volume of 8922900 shares changing hands.

The industrial products company reported $0.80 EPS for the quarter, topping the Zacks’ consensus estimate of $0.75 by $0.05. HD Supply had a net margin of 16.55% and a return on equity of 46.02%. The business had revenue of $1.37 billion during the quarter, compared to analysts’ expectations of $1.34 billion. During the same quarter in the previous year, the company earned $0.83 EPS. The business’s quarterly revenue was up 7.5% compared to the same quarter last year.

HD Supply declared that its board has approved a share buyback program on Tuesday, August 29th that authorizes the company to repurchase $500.00 million in shares. This repurchase authorization authorizes the industrial products company to buy shares of its stock through open market purchases. Shares repurchase programs are generally an indication that the company’s board of directors believes its shares are undervalued.

A number of brokerages have recently issued reports on HDS. BidaskClub raised shares of HD Supply from a “hold” rating to a “buy” rating in a research note on Thursday. Goldman Sachs Group reaffirmed a “neutral” rating and issued a $35.00 price objective on shares of HD Supply in a research note on Wednesday, August 16th. ValuEngine raised shares of HD Supply from a “hold” rating to a “buy” rating in a research note on Tuesday. Zacks Investment Research upgraded shares of HD Supply from a “hold” rating to a “buy” rating and set a $35.00 price target for the company in a report on Friday, August 25th. Finally, Morgan Stanley reiterated an “equal weight” rating and set a $38.00 price target (up from $37.00) on shares of HD Supply in a report on Monday, October 2nd. Eleven equities research analysts have rated the stock with a hold rating and seven have assigned a buy rating to the stock. HD Supply currently has an average rating of “Hold” and a consensus price target of $38.85.

A number of hedge funds have recently made changes to their positions in the stock. Creative Planning boosted its holdings in shares of HD Supply by 15.2% during the 2nd quarter. Creative Planning now owns 3,800 shares of the industrial products company’s stock valued at $116,000 after acquiring an additional 500 shares during the last quarter. Pinebridge Investments L.P. boosted its holdings in shares of HD Supply by 170.0% during the 2nd quarter. Pinebridge Investments L.P. now owns 5,400 shares of the industrial products company’s stock valued at $165,000 after acquiring an additional 3,400 shares during the last quarter. Daiwa Securities Group Inc. purchased a new stake in shares of HD Supply during the 2nd quarter valued at about $181,000. Massey Quick Simon & CO. LLC purchased a new stake in shares of HD Supply during the 3rd quarter valued at about $185,000. Finally, Global X Management Co. LLC boosted its holdings in shares of HD Supply by 220.9% during the 2nd quarter. Global X Management Co. LLC now owns 6,385 shares of the industrial products company’s stock valued at $196,000 after acquiring an additional 4,395 shares during the last quarter.

The company has a current ratio of 2.04, a quick ratio of 1.41 and a debt-to-equity ratio of 3.57. The stock has a market capitalization of $7,204.31, a price-to-earnings ratio of 15.46, a PEG ratio of 0.86 and a beta of 1.40.

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About HD Supply

HD Supply Holdings, Inc is an industrial distributor in North America. The Company’s segments include Facilities Maintenance, Construction & Industrial-White Cap, and Corporate. As of January 29, 2017, the Company operated through approximately 500 locations across 48 states in the United States and six Canadian provinces.

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