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Home Depot, Lowe is on track to grow profits in 2022

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  • Home Depot reports its second quarter on August 16
  • Lowe’s reports its second quarter on August 17
  • Both stocks are trading above their 50-day moving average

Home Depot (NYSE: HD)

and Lowe’s (NYSE: LOW) have become ubiquitous sightings in American cities and towns large and small. Both home improvement giants operate north of 2,200 stores each.


MarketBeat.com – MarketBeat

Both are on deck to report earnings next week.

I may be unique among home repair consumers, but I will often get mixed up. The only reason Lowe’s often wins is because it’s about five minutes closer to my house.

But in reality, the two companies operate their business differently, relying on different suppliers and emphasizing different products in the mix.

In 2020 for example, DIY store said it would invest $1.2 billion to build about 150 new facilities designed to reach 90% of U.S. customers with same-day or next-day delivery. These centers are called Flatbed Distribution Centers.

In the meantime, lowe’s last month, Into launched the Blue: Lowe’s Product Pitch Event, which invites small businesses to pitch their products, which Lowe’s could eventually offer for sale.

In an interview with the Charlotte Business Journal, Sarah Dodd, Lowe’s Senior Vice President of Global Merchandising, said, “It’s hard for smaller businesses or entrepreneurs or people to get in front of Lowe’s buyers, and this is a huge opportunity to do that in a live pitch environment. This is a way for them to make their voices and ideas heard.”

Beating the opinion of analysts

Home Depot will report its second quarter on Aug. 16, with analysts eyeing earnings per share of $4.95 a share on revenue of $43.38 billion. That would represent an increase compared to last year’s quarter.

MarketBeat earnings data show that Home Depot has beaten analysts’ earnings expectations for the past eight quarters. It exceeded revenue expectations in the past nine quarters.

Of course, the boom in home purchases and renovations in the Covid era fueled tremendous growth. Home Depot grew by double digits between July 2020 and January this year. Revenues also grew double-digit in six of the past eight quarters.

Analysts expect Home Depot to generate full-year revenue of $156 billion. Earnings this year come in at $16.48 per share, up 6% from 2021. That consensus estimate was recently revised higher.

Next year, that will grow another 5% to $17.33 per share.

Construction boom growth

According to the ratings of MarketBeat analystsWall Street’s consensus on Home Depot is a “moderate buy” with a price target of $368.45, up 18.11%.

Lowe’s also benefited from the growth of the construction boom. Earnings have risen double digits in six of the past eight quarters. Lowe’s revenue growth has slowed to single-digit growth in the past four quarters, after booming in late 2020 and early 2020.

Lowe’s has made a name for itself as the low-cost provider. It also partners with suppliers to cut costs, which it then passes on to customers.

Analysts expect Lowe’s to reach $97 billion in revenue this year. Their rating on the stock is also “moderate buy,” with a price target of $238.58, representing upside potential of 18.20%.

Lowe’s will report its second quarter on August 17, the day after Home Depot reports. It returns earnings per share of $4.65 on revenue of $28.26 billion.

This year, which is fiscal 2023, earnings are expected to come in at $13.44 per share, up 11%. For fiscal 2024, that has grown another 9% to $14.59 per share.
Home Depot, low on track to grow profits in 2022

So is any of these now for sale?

Home Depot has corrected 24.46% so far. It has recently started a rally, rising 9.15% in the month and 4.17% in the last three months. It holds above the June 22 low of $264.51.

Meanwhile, Lowe’s is down 21.96% so far this year and is up 11.26% last month and 2.15% over the past three months. It has also risen since the June low of $170.12.

Both stocks are trading above their 50-day moving average, but below their 200-day lines. While the shorter-term line remains below the longer line, it is often an indicator that the stock does not yet have enough momentum to start a rally, despite strong fundamentals.
Home Depot, low on track to grow profits in 2022

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