Lowe's Companies Inc LOW:NYSE

Last Price$226.10Cboe Real-Time Last Sale as of 3:30PM ET 1/27/22
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Today's Change-2.00(0.88%)
Bid (Size)$226.03 (100)
Ask (Size)$226.24 (200)
Day Low / High$224.01 - 232.68
Volume2.8 M

Home Depot, Lowe's to Emerge Stronger From Pandemic Even as Tailwinds Subside, Oppenheimer Says

11:34AM ET 12/06/2021 MT Newswires
US home improvement retailers are expected to see continued growth even as COVID-19 tailwinds subside, mainly due to "persistently strong" underlying trends within the housing sector, easing risks for key retailers, according to Oppenheimer.

The industry has always held a strong position within the discretionary consumer sector, analysts including Brian Nagel said in a note Monday. While challenges remain, the industry is not expected to face "risks of a significant, transitional-type setback," the advisory firm said.

Homeowners' interest in repairing and enhancing their properties came as high demand combined with a low supply of housing, driving up home prices, the analysts said.

Even as the pandemic slows, companies like Home Depot (HD) and Lowe's (LOW) "should emerge as even stronger players, catering to larger bases of target consumers, including professionals, given sharper and more expansive merchandising, improved digital connectivity, and even stronger scale," Nagel and the analysts said.

"In our view, persistently strong, underlying trends within housing should serve to buffer well the impacts of any potential pandemic related pull-forward in demand at HD and LOW in coming quarters," they said.

Oppenheimer raised Home Depot to outperform from perform and set a price target of $470 as it expects the transition to the post-COVID-19 backdrop to be less burdensome for the company. The price target is based on a forecast that reflects "outsized returns on invested capital and the stature of the chain as a bellwether within the broader US economy," the note said.

Also, the analysts now expect earnings per share for fiscal to be $15.57, up from the prior outlook for $12.91. Oppenheimer sees 2023 EPS of $17 from $13.91 previously.

Lowe's (LOW) is still Oppenheimer's top pick within home improvement retail, with the price target on the outperform-rated stock at $300 from $235 previously.

Price: 416.44, Change: +8.63, Percent Change: +2.12