Brokerages cut PT on Home Depot, Lowe over soft Q3 consumer demand
07/11/2023 15:11
** Brokerages expect home improvement chains Lowe's LOW.N
and Home Depot HD.N to report weaker Q3 results hurt by higher
interest rates, a soft housing market and an uncertain economy
** "Key sector sales indicators we track paint a softer
picture for home improvement during 3Q," Baird analysts say
** Baird cuts price target on HD to $330 from $360 and
reduces PT on LOW to $225 from $250
** Citi says slowing home improvement spending, particularly
on do-it-yourself (DIY) projects and choppy fall seasonal sales
will weigh on Q3 results
** Citi lowers PT on HD to $333 from $375 and cuts LOW PT to
$199 from $250
** Telsey Advisory Group (TAG) analysts lower projections
for Q4 and FY24 as sector headwinds have "intensified beyond
expectations since the end of August"
** TAG maintains "market perform" rating on HD, cuts PT to
$325 from $330
** RBC analyst Steven Shemesh says as DIY sales are ~75% for
LOW and ~55% for HD, it will result in a disproportionate
softness in the near-term as consumers pull back on deferrable
spend
** Weak Q3 results from home improvement peers Floor & Decor
FND.N , Tile Shop TTSH.O , Tractor Supply TSCO.O "solidified
our concerns" says TAG analyst Joseph Feldman
** Home Depot reports Q3 results on Nov. 14 while Lowe posts
results on Nov. 21
** YTD, HD down 6.7%, while LOW down ~3%, up to last close
(Reporting by Annett Mary Manoj and Savyata Mishra)
((Annettmary.manoj@thomsonreuters.com))