5 Companies Upping Their Estimates

New Forecast: FY2009 EPS (continuing operations) flat to up 7%
Old Forecast: FY2009 EPS (continuing operations) down 7%

If Home Depot (HD) can hit the high end of its range, it would be an impressive feat. But if that happens investors shouldn’t equate it with a broader recovery in the housing industry. Rather, the company believes that focusing on customer service and efficiency in the supply chain will enable it to keep costs under control and take advantage of a strengthening home improvement market since consumers aren’t moving into new houses. The company thinks it can provide a return on invested capital of about 15%.

“Today’s news builds upon what I’ve been seeing from Home Depot since the middle of 2008, where they’ve become much more efficient in their operations,” says Brian Sozzi, an equity research analyst at Wall Street Strategies. He adds that CEO Frank Blake’s emphasis on the shopping experience has paid off: “If you’re a longtime Home Depot shopper, you can really tell the difference.”