Talking Home Improvement With Telsey's Joe Feldman
Joe Feldman, senior managing director and assistant director of research at Telsey Advisory Group, went over Home Depot's (NYSE: HD) Q2 results, and talked home improvement in general amidst the housing recovery on CNBC's Squawk Box Tuesday morning.
"People have been pretty concerned heading into the second quarter earnings that sales would be a little challenged for a lot of the retailers, and you know, the concerns for home depot were just 'Were the expectations too high?' and they even actually came out and beat it," said Feldman.
The company reported a 17.2 percent gain for its Q2 net earnings, with a beat of $1.24 EPS on revenues of $22.52 billion over analysts' estimates of $1.22 per share on revenues of $21.83 billion.
"The new homes, or the turnover of homes, is a pretty small part of the market that drives sales at Home Depot and Lowe's. You Know, almost probably 85, 90 percent of Home Depot and Lowe's (NYSE: LOW) sales come from people that are just staying put, and if they feel better about the value of their home, they feel okay about their job situation, they're investing," said Feldman.
He said that both companies are "well-positioned going into the back half of the year," but noted that there's still room left in this rally for Home Depot, saying that Telsey's target price is $88. Feldman advised investors to play Home Depot because of their robust trends, while including that Lowe's will pick up as the company grows in the future.
At the time of this writing, Jason Cunningham had no position in the mentioned equities.
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