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Can Home Depot and Lowe’s Stock Continue Rallying?

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The Home Depot in Marina Del Rey, California


CHRIS DELMAS/AFP/Getty Images


Home Depot

and

Lowe’s

both fell around 2% on Friday, following downgrades from

Oppenheimer,

which worries that the stocks’ rallies have largely run their courses.

Analyst Brian Nagel cut his rating on Home Depot (ticker: HD) and Lowe’s (LOW) to Perform from Outperform, and lowered his price targets to $305 from $320, and to $180 from $185, respectively. While he still likes the long-term outlook for the stocks, he worries that the recent gains have made them pricey, while comparable sales will enviably slow from their pandemic highs.

Nagel is concerned that the “market is becoming too lax toward chances of a post-Covid-19 sales growth downshift at Home Depot/Lowe’s and potential impact on shares,” especially as the stocks, up about 26% and 34% year to date, are trading above their pre-pandemic peaks.

Of course, no one

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Lowe’s Stock Can Keep Rallying Because People Will Be Spending More Time at Home for Longer

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Lowe’s shares have rallied as the pandemic has spurred people to spend more money fixing up their homes.


Justin Sullivan/Getty Images


Lowe’s

stock has jumped some 35% in 2020, as demand booms amid the Covid-19 pandemic. Loop Capital argues the shares could see another 20% gain, as consumers continue to pour money into their homes.

Analyst Laura Champine reiterated a Buy rating on Lowe’s (ticker: LOW) shares Wednesday, while raising her price target to $195 from $180.

She is increasingly confident that the company will continue to see sales boosted by the crisis, as people realize that they’ll likely be spending more time at home for longer, and need that space to serve more needs than it used to.

Indeed, as Barron’s has reported, the majority of the nation’s public school students were set to start the academic year remotely, while employers warm up to the idea of

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