Home Depot And Lowe’s Report Earnings Soon. Here’s How Much Traders Expect The Stocks To Move

Key Takeaways

• Home Depot and Lowe’s are set to report earnings this week, with traders anticipating sizable moves in the stocks.
• Both companies are expected to report growing sales, with business from professional contractors seen outpacing DIY spending.

Home Depot and Lowe’s are set to report earnings on Tuesday and Wednesday morning, respectively, with traders anticipating sizable moves from the home-improvement retailers’ stocks.

Recent options pricing suggests traders see Home Depot (HD) shares swinging up to 4% in either direction by the end of the week. A move of that size from Monday afternoon’s level around $337 could see the stock rally as high as $350, recovering some of its recent losses, or slip to $324. Lowe’s (LOW) stock is seen moving up to 5%, which could drive it as high as $225, or drag it below $205.

Heading into the results, Home Depot shares are down about 2% for the year so far, while Lowe’s has plunged 11%, amid some concerns that squeezed consumers could continue to put off big-ticket spending on renovations and appliances. Home Depot was also pressured last week after the company announced CEO Ted Decker is taking a temporary medical leave of absence. Senior executive vice president Ann-Marie Campbell and CFO Richard McPhail are jointly assuming the CEO’s duties until Decker returns.

Why This Matters to Investors

Results from Home Depot and Lowe’s could offer investors more insights into the state of the housing market, and how willing consumers are to take on big spending projects.

Bank of America analysts recently wrote that they expect spending growth from professional contractors to outpace do-it-yourself home improvement projects, which they said could favor Home Depot, as it relies more on pro sales than Lowe’s. The analysts also said both retailers are likely to have gotten a boost from tariff refunds, which could offset higher supply-chain costs.

Analysts expect Home Depot to report adjusted earnings of $4.73 per share on a 4% year-over-year rise in revenue to $47.28 billion. Lowe’s is seen reporting adjusted EPS of $4.23 on a 9% jump in revenue to $26.09 billion. Both retailers are projected to report same-store sales growth of just under 1% for the quarter, according to estimates compiled by Visible Alpha.

Analysts are largely bullish on the stocks of both companies. Nine out of 10 analysts tracked by Visible Alpha have “buy” recommendations for Home Depot, while 10 out of 11 have bullish ratings for Lowe’s. The mean target for Home Depot at $391 would suggest roughly 16% upside from the stock’s recent level, while the $272 average target for Lowe’s would imply a 27% rise.