X
<

Home Depot and Lowe's: Will There Be Momentum in 3Q17?

PART:
1 2 3 4 5 6 7 8 9
Home Depot and Lowe's: Will There Be Momentum in 3Q17? PART 1 OF 9

What’s Driving Home Depot and Lowe’s Stock Price?

Home improvement companies

Since most home improvement companies already posted their 2Q17 earnings, it’s time to compare them. In this series, we’ll discuss Home Depot (HD) and Lowe’s (LOW) 2Q17 performance.

What’s Driving Home Depot and Lowe&#8217;s Stock Price?

Interested in BBBY? Don't miss the next report.

Receive e-mail alerts for new research on BBBY

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Home Depot’s stock performance

In 2Q17, Home Depot posted an adjusted EPS (earnings per share) of $2.25 on revenues of $28.1 billion. Analysts expected the company to post EPS of $2.22 on revenues of $27.8 billion. The better-than-expected 2Q17 earnings and expectation of an increase in sales from the recovery efforts after Hurricane Harvey and Hurricane Irma increased investors’ confidence. As a result, Home Depot’s stock price rose. As of September 26, 2017, Home Depot was trading at $161.26—a rise of 4.5% since the announcement of its 2Q17 earnings on August 16, 2017.

Lowe’s stock performance

Lowe’s posted an adjusted EPS of $1.57 on revenues of $19.50 billion. Analysts expected the company to post EPS of $1.61 on revenues of $19.53 billion. Despite posting lower-than-expected 2Q17 earnings, the company’s stock price rose due to the expectation of increased sales from the recovery efforts after the hurricanes. As of September 26, 2017, Lowe’s was trading at $79.29—a rise of 4.6% since the announcement of its 2Q17 earnings on August 23, 2017.

YTD performance

So far, 2017 has been a good year for home improvement companies. Since the beginning of 2017, Home Depot has returned 20.3%, while Lowe’s stock price has risen 11.5%. The announcement that Sears Holdings would start selling its Kenmore appliances through Amazon.com (AMZN) offset some of the companies’ higher stock prices. Investors fear that Amazon’s entry into the appliances sector could curb home improvement retailers’ pricing power and lower their profitability.

During the same period, Bed Bath & Beyond (BBBY) and Williams-Sonoma (WSM) have returned -43.6% and 3.3%, respectively. The S&P 500 Index (SPX) and the SPDR S&P Homebuilders ETF (XHB) have returned 11.5% and 15.2% YTD (year-to-date), respectively.

In the next part, we’ll discuss Home Depot and Lowe’s revenues in 2Q17.

X

Please select a profession that best describes you: