Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

JPMorgan hikes Lowe's to Overweight amid home improvement sector turnaround

Published Feb 12, 2024 08:04AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. JPMorgan hikes Lowe's (LOW) to Overweight amid home improvement sector turnaround
 
LOW
+1.06%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HD
+1.86%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

JPMorgan analysts upgraded Lowe’s Companies (NYSE:LOW) to Overweight from Neutral and added the stock to its Focus List on Monday. They also raised the target price to $265 from $210.

“We continue to believe that goods share of wallet headwinds are moderating with trends ultimately reverting back toward wage growth, as this is historically the barometer for consumption trends,” analysts noted.

Moreover, analysts estimate that the home improvement sector's current share of consumer spending is nearly 5% below its pre-COVID levels, with the do-it-yourself (DIY) segment, which constitutes 75% of Lowe's (LOW) sales compared to 50% for Home Depot (NYSE:HD), facing greater challenges since the post-COVID normalization began in early 2021.

Also, they note that Lowe's largest sales category, appliances, which accounts for 13.9% of its revenue versus 9.2% for Home Depot, is more advanced in the deflation process.

The housing market is expected to witness a 150 basis points decrease in rates within the next year, potentially lowering mortgage rates to about 5.5% by January 2025, and to around 6% by September 2024, assuming stable spreads.

Historically, when mortgage rates hit 5.5%, sales of single-family existing homes (EHS) reached roughly 4.3 million, indicating a potential growth of over 20% from current figures.

“While we continue to think that the rebound will be partly muted by the locked-in mortgage rate dynamic, the sheer potential magnitude of such a recovery suggests a strong acceleration in trends against arguably low consensus expectations.”

“As indicated by our note title, we believe it is widely expected that LOW will guide somewhere in the $12.00-$12.50 range for 2024 to clear the decks,” analysts said.

JPMorgan hikes Lowe's to Overweight amid home improvement sector turnaround
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email