Oppenheimer Analyst Breaks Down Lowe's Q3 Report

Lowe's Companies, Inc. LOW reported third quarter results Tuesday that consisted of a top- and bottom-line beat and a reiteration of its full year fiscal 2017 guidance.

The Analyst

Oppenheimer's Brian Nagel.

The Thesis

Overall, Lowe's reported a "good quarter," but the problem is the company's results are often compared to its much larger rival, Home Depot Inc HD, Nagel said during CNBC's "Squawk Box" segment. (See Nagel's track record here.) 

During the third quarter, Lowe's reported a 5.7 percent comp increase, which is a "good number" on its own, but falls short of Home Depot's 7.7 percent comp increase in the same third quarter, Nagel said. 

The company's full-year comp guidance of 3.5 percent implies that Lowe's benefited in the quarter from hurricane-related sales, the analyst said. The retailer maintained its full-year guidance despite recording a beat in the third quarter, but investors shouldn't read too much into this, Nagel said. 

"They beat in Q3, they didn't raise guidance," he said. "I don't know if I would necessarily read into that they are expecting some kind of slowdown. That probably implies they are trying to set the bar a down a little bit lower for themselves and hopefully beat results again."

Price Action

Shares of Lowe's were trading lower by nearly 2 percent ahead of Tuesday's market open.

Related Links:

Home Deport Surrenders Most Of Tuesday's Gains

Lowe's Earnings Report Shows It's No Home Depot

Photo courtesy of Lowe's.