Categories
investing.com

Lowe’s Could Benefit from Home Depot’s Stock Sale – Bernstein

Analysts at Bernstein have cut their price target on Home Depot (HD) to $314 from $333, maintaining a Market Perform rating on the stock. They believe the sell-off may have created a short-term buying opportunity for Lowe’s (LOW).

HD reported a weak 1Q top-line, with comp sales down 4.5%, a 450-bps miss vs guidance. The analysts are concerned with weaker-than-expected consumer demand and lack of visibility into lumber deflation. They found little consolation in better-than-expected profitability in 1Q, as it was a one-time legal settlement that drove a 2c beat vs. Cons.

The small sell-off may have created a short-term buying opportunity for LOW, which reports next Tuesday, since HD reported Pro was weaker than DIY (though both negative), and LOW is less exposed to Pro than HD. Investors should also consider Floor & Decor Holdings (FND) here.