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Home Depot, Lowes Poised For Q2 Top-Line Surprise?

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With both Home Depot (NYSE: HD) and Lowes Companies (NYSE: LOW) slated to post second-quarter results this week, one analyst thinks both shares will see a bump.

Credit Suisse's Gary Balter expects both companies to meet or beat an expected four percent increase in same-store sales. He figures both will present top-line surprises.

"Channel checks with suppliers and other data point to strong sales," Balter said in a research note Monday, which he called "names to own ahead of earnings."

Sears has once again donated market share, Balter said, "and there remains a huge pent-up demand for housing repair and maintenance" of an aging U.S. housing stock.

Balter rates both companies at Outperform with an $87 target on Home Depot and $55 on Lowes.

Home Depot, set to post earnings before the market opens Tuesday, is expected to report profit of $0.92 per share, down from $1.24 per share a year ago. Revenue is expected to grow 4.7 percent to $23.6 billion, from $22.522 billion a year ago.

Lowes, slated to post Wednesday, is expected to show a 16 percent increase in earnings to $1.02 per share, compared with $0.88 a year earlier.

Lowe's revenue is forecast to grow 5.4 percent to $16.8 billion, from $15.7 billion the prior year.

Home Depot traded recently at $83.90 per share, up 0.25 percent; Lowes was up one percent to $50.50.

Latest Ratings for HD

DateFirmActionFromTo
Apr 2016Goldman SachsMaintainsNeutral
Mar 2016BarclaysInitiates Coverage onOverweight
Feb 2016SunTrust Robinson HumphreyMaintainsNeutral

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