BUZZ-Home Depot, Lowe's up after Telsey Advisory Group upgrades to 'outperform'
Shares of Home Depot and Lowe's rose approximately 1% in premarket trading after Telsey Advisory Group upgraded both stocks to 'outperform' from 'market perform.' The upgrade reflects increased confidence in their sales and earnings growth for 2025 and beyond, aided by expected Federal Reserve interest rate cuts and recovery from recent hurricanes. However, Telsey Advisory Group cautions that both companies may experience softer results in the short term due to current consumer spending weaknesses. Home Depot and Lowe's are set to report Q3 results on November 12 and 19, respectively.
Shares of home improvement retailers Home Depot (HD.N) and Lowe’s (LOW.N) up ~1% at $404 and $270, respectively, in premarket trading
Telsey Advisory Group upgrades stocks to “outperform” from “market perform,”
Have increased confidence in HD and LOW’s return to solid sales and earnings growth in 2025 and beyond - TAG analyst Joe Feldman writes in a note
TAG expects companies to benefit from Federal Reserves cuts in interest rate, with lower rates spurring consumer spending on pricier home improvement projects
Recovery following Hurricanes Helene and Milton should also provide a tailwind to home improvement retailers, as pointed out by smaller peer Floor & Decor in October
TAG notes HD and LOW saw sales lift in the aftermath of hurricanes in the past
Home Depot has significant opportunity to grow its Pro business following acquisition of building products supplier SRS Distribution, while LOW has also benefited from increased focus on its Pro business over the last four years -TAG
Still, TAG notes companies could face softer results in the near term due to current weakness in consumer spending on pricier goods
Home Depot reports Q3 results on Nov. 12, LOW on Nov. 19
YTD, HD stock up ~15%, while LOW up ~20% as of last close