Tags: lowes | year | backyard | home | improvement

Gordon Haskett: Lowe's, 3 Others Are 'Year of the Backyard' Stocks

Gordon Haskett: Lowe's, 3 Others Are 'Year of the Backyard' Stocks
Gary-Arbachdreamstime

By    |   Thursday, 04 June 2020 07:58 AM

Gordon Haskett analyst Chuck Grom advises savvy investors that this could be the “Year of the Backyard,” as he predicts strong consumer demand for the home-improvement retailers even after stay-at-home orders are lifted.

Grom boosted his rating on Lowe’s Cos. (LOW) to “buy” from “hold,” with a price target of $151, Barron’s said. Lowe’s stock rose $2.66, or 2.1%, Tuesday to close at $131.98.

While the stock has already climbed nearly 10% year to date, there is still reason to think it’s worth buying, he writes. “Enough evidence has emerged in recent weeks to suggest that: (1) consumers' willingness to invest in their home via DIY projects will continue for many quarters and (2) the recent dislocation in the housing market will likely be short-lived.”

He also suggested peers like Tractor Supply (TSCO), Wayfair (W) and Williams-Sonoma (WSM), he writes.

Meanwhile Lowe's outperformed Home Depot Inc. (HD) in the last quarter.

For years, investors have lamented that Lowe’s had fewer stores in cities. For example, it doesn’t have a store in Manhattan, while Home Depot does. But that helped Lowe’s as metro areas faced stiffer social-distancing policies and infections. About a quarter of Lowe’s locations are in rural areas, where sales outperformed the company average. Revenue gains were softer in cities, home to only 10% of its locations, Bloomberg said.

Being “further out from the major metros worked in their favor this quarter,” RBC analyst Scot Ciccarelli said in a research note. Businesses outside cities were less impacted, he said.

Chief Executive Officer Marvin Ellison, a former Home Depot executive, also said that its business with contractors, what it calls the pro division, wasn’t hit as hard as expected. The bulk of its pro customers are small businesses that could shift to outdoor work and do less major home renovations that were delayed or canceled because many people don’t want workers in their homes during the pandemic. Lowe’s also generates fewer sales from contractors than Home Depot.

© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
StreetTalk
Gordon Haskett analyst Chuck Grom advises savvy investors that this could be the “Year of the Backyard,” as he predicts strong consumer demand for the home-improvement retailers even after stay-at-home orders are lifted.
lowes, year, backyard, home, improvement
328
2020-58-04
Thursday, 04 June 2020 07:58 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved