Using the PEG framework with analyst consensus forward EPS growth of 8.5% plus 2.8% dividend yield, The Home Depot, Inc. has a fair value of $127.68 based on NTM EPS (FY2027) of $15.04. The current PEG ratio is 2.60.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG tends to undervalue slow growers — consider dividend yield and asset value instead.
| EPS Growth RateForward | 5.7% |
| Dividend Yield | +2.8% |
| Adjusted Growth (clamped 8–25%) | 8.5% |
| Fair P/E | 8.5x |
| NTM EPS (FY2027) | $15.04 |
| Fair Value | $127.68 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $14.23 | — | — |
| FY2027E | $15.04 | +5.7% | 26 |
| FY2028E | $16.29 | +8.3% | 25 |
| FY2029E | $17.74 | +8.9% | 17 |
| FY2030E | $19.17 | +8.0% | 8 |
| FY2031E | $19.88 | +3.7% | 11 |
6Y Forward EPS CAGR: 5.7%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $16.4B | $15.53 | — |
| FY2022 | $17.1B | $16.69 | +7.5% |
| FY2023 | $15.1B | $15.11 | -9.5% |
| FY2024 | $14.8B | $14.91 | -1.3% |
| FY2025 | $14.2B | $14.23 | -4.6% |
4Y Historical EPS CAGR: -2.2%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.