This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Home Depot, Lowe's Estimates Cut After Warnings From Floor, Farm Retailers

NEW YORK (TheStreet) -- Weak results from Tractor Supply (TSCO) and Lumber Liquidators (LL) do not bode well for Home Depot (HD) and Lowe's (LOW) near-term outlook, Deutsche Bank warned in a note to investors earlier today.

WHAT'S NEW: After hardwood floors retailer Lumber Liquidators and farm products retailer Tractor Supply pre-announced weaker than expected Q2 results, Deutsche Bank analyst Mike Baker reduced his estimates for Home Depot and Lowe's. The comparative sales of Home Depot and Lowe's have historically had a positive correlation with those of Tractor Supply and Lumber Liquidators, explained Baker. Lumber Liquidators, like Home Depot and Lowe's, is exposed to housing markets, the analyst stated. Meanwhile, like Tractor Supply, Home Depot and Lowe's are exposed to the outdoor/weather sensitive sector, according to Baker. However, there are differences in the companies' business models, and comparative sales at Home Depot and Lowe's are probably trending better than at Tractor Supply and Lumber Liquidators, Baker believes. He lowered his second quarter comparative sales growth forecast for Lowe's to 4% from 4.5%, and for Home Depot to 4.5% from 5%. Baker's Q2 EPS estimates for both home improvement companies are now 1c below consensus levels. He kept a Buy rating on Lowe's and Hold ratings on Home Depot and Tractor Supply.

PRICE ACTION: In early trading, Home Depot fell 2% to $79.07, Lowe's declined 1.8% to $47.02, Tractor Supply tumbled 5% to $58.23, and Lumber Liquidators plunged 22% to $54.70. Shares of Tile Shop (TTS), which is also exposed to housing markets, fell 11% to $11.55 in early trading.

Reporting by Larry Ramer.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $122.37 -0.50%
FB $95.21 -1.84%
GOOG $632.59 0.10%
TSLA $266.79 1.13%
YHOO $37.42 -0.66%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs