Sector Spotlight: Which Home Improvement Retailer is Wall Street’s Darling Now?
Home Improvement retailers Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) announced earnings this week. We also learned the Case-Shiller Home Price Index is double dipping. So, which company is Wall Street favoring now?
Home Depot (NYSE:HD)
At the moment, Home Depot is back on top. The company is “out executing” rival Lowe’s and on Tuesday offered the company’s best quarterly earnings in 5 years. Particularly, Home Depot did an awesome job selling appliances in the key November-December holiday period.
This is a pleasant turn of events for long time Home Depot shareholders as the company rested on its laurels for years, letting Lowe’s enter the market and ultimately take huge market share. Given that Wall Street seems to flip-flop favoring one home improvement retailer at a time, Home Depot seems to be the darling of the moment.
Lowe’s is probably suffering from a bit of the fat cat effect. They stormed onto Home Depot’s turf, kicked their ass in the last housing boom, and got rich. Now, Lowe’s is dealing with a shuffle in key management positions and dealing with re-motivating their once hungry staff.
Lowe’s revealed comparable-store sales (stores open at least one year) were up only 1.1 percent in Q4 versus a strong 3.9 percent rise globally and 4.8 percent rise in the US at Home Depot. That’s the widest comparable gap since 2000!
Looks like Wall Street will be wearing orange for now.
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