As rivals Home Depot and Lowe's adjust to inflation-conscious consumers, fellow retailer Floor & Decor builds the foundation for a new breakout. FND stock now earns a spot on the IBD Leaderboard watchlist while it test a new buy point in a cup with handle.
Earning a 97 Composite Rating in IBD Stock Checkup, Floor & Decor ranks first among its peers in the building products retail group. Home Depot and Lowe's join Tractor Supply and SiteOne Landscape Supply among the group leaders. Like FND stock, TSCO continues to plow a potential breakout move.
Both Floor & Decor and Tractor Supply cultivated a spot on this month's list of new buys by the best mutual funds.
In a further sign of institutional demand, FND stock earns a B Accumulation/Distribution Rating and a 1.6 up/down volume ratio. Both scores point to strong buying among large investors.
Floor & Decor Lays Foundation For Growth
Based in Atlanta, Floor & Decor operates 191 warehouse-format stores and six design studios across 36 states. Serving homeowners, pros and commercial enterprises, the retailer sells tile, wood, laminate, vinyl and natural stone flooring products, as well as decorative accessories.
Rebounding earnings growth has attracted top investors.
EPS gains have accelerated for three straight quarters, rising from a 4% year-over-year slowdown in Q1 2022 to a 45% increase at year's end. First-quarter earnings are due May 4, and analysts expect flat EPS growth for the quarter and a 2% drop for the full year. But Wall Street forecasts 27% and 24% rebounds in 2024 and 2025, respectively.
Revenue topped $1 billion each quarter last year but sales growth slowed over the same period, from 31% in Q1 to 15% in Q4.
FND Stock Builds Buy Point
Floor & Decor is putting the finishing touches on an early-stage cup with handle and 99.47 buy point. Its relative strength line has been moving sideways but remains within striking distance of a new 52-week high.
In a sign of improving technical strength, the 21-day exponential moving average has climbed back above the 50-day line.
Let's see if FND stock can punch through the new entry in volume at least 40% above average on the day of the breakout.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
