Shares of Home Depot (HD) – Get Report and Lowe’s (LOW) – Get Report were gently pressured Friday after analysts at Oppenheimer downgraded the home-improvement retailers on concern about near-term risks.
Home Depot and Lowe’s were both downgraded to perform from outperform. Home Depot’s price target was lowered to $305 from $320 and Lowe’s to $180 from $185.
“To be clear, our favorable intermediate- to longer-term stance for the group
and HD and LOW is unchanged,” analyst Brian Nagel said.
‘However, nearer term, we’re increasingly concerned
that the market is becoming too lax toward chances of a post-covid-19 sales growth
downshift at HD/LOW and [the] potential impact on shares,”
In a “post-pandemic reset” for home retail, Oppenheimer has a more favorable outlook for Lowe’s than Home Depot given its strengthening margins and discounted valuation.
The firm lowered its fiscal 2021 earnings EPS estimate for Home Depot