Wedbush Analyst: Home Depot Q4 At Risk From High Expectations

Home Depot Inc HD shares face a risk from high expectations when the company posts fourth-quarter results before the bell Tuesday.

Wedbush Analyst Seth Basham told Benzinga Monday that "earnings whispers" are more than 4 percent above the Wall Street consensus view, while same-store sales are the subject of similar rumors.

"Given high expectations, there is more risk into the event, but the bias is still to the upside," Basham said of the upcoming report.

Shares of the home improvement company closed Monday at $112.28.

Analysts on average expect Home Depot to post earnings growth of 22 percent to $0.89 a share on sales growth of 5.6 percent to $18.7 billion.

Same-store sales are expected to increase 5.4 percent.

Basham expects earnings may be above the consensus, "but possibly not close to the high end of the whispers."

Same-store sales and margins will be in line with Wall Street expectations, in Basham's view.

A further risk may surface with Home Depot's outlook from its management: "the company often doesn't fully factor in buybacks," according to Basham.

Wall Street expects first-quarter earnings of $1.15 a share, on sales of $20.75 billion.

Brianna Valleskey contributed to this report.