09:41 AM EDT, 05/10/2024 (MT Newswires) -- Home Depot's ( HD ) Q1 results on May 14 will likely be "largely in line" with market expectations and the retailer will likely also reaffirm its "conservative" 2024 guidance, Wedbush said in a note to clients on Friday.

"While we initially viewed the company's 2024 guidance as conservative, we now see it as realistic given choppy sales trends partly driven by a delayed spring, increasing mortgage rates and a further-delayed housing recovery," said Wedbush analysts including Seth Basham.

However, the investment firm sees the retailer delivering a quarter-on-quarter improvement in comps to about -2%, which is in line with Wall Street estimates, and would be better than the -3.5% in Q4.

Wedbush also sees Home Depot's ( HD ) Q1 gross margins at 34.2% compared with consensus estimates at 34%, with "the slight upside driven by permanent cost cuts and reductions in product and transportation costs."

"All in, we see slight upside potential to consensus' $3.59 EPS estimate for 1Q24, but expect no change to FY24 EPS guidance of ~$15.45," the analysts said.

Wedbush has an outperform rating and $410 price target on Home Depot ( HD ).

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