Lowe’s Cos. LOW,
shares fell 2.8% in early Monday trading after the home improvement store was downgraded to neutral from outperform at Wedbush. Analysts lowered the price target from $225 to $210. Wedbush, in his note, cites weakness in the housing sector and says existing dollar sales of existing home sales have peaked with a minimal growth forecast for 2022. Less affordability and limited supply are also putting pressure on sales. Accordingly, very difficult comparisons could result in medium-single digit declines in average compositions for Home Depot and Lowe’s for the next four quarters (vs. consensus for a low-single digit decline), and very low single-digit compositions from 2Q-4Q22 (vs. consensus average single digit increase) in our baseline scenario analysis,” the note said. Analysts maintained their neutral rating on Home Depot Inc. HD,
Wedbush analysts led by Seth Basham also say homeowners have been making renovations to accommodate the work-from-home lifestyle. “If companies require employees to work full-time in the office when the pandemic ends, this spending could slow down,” the note said. Lowe’s stock is up 21.6% so far, while the S&P 500 index SPX,
rose by 17.5% over the period.