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An Oppenheimer analyst increased his price target to $255 from $215 for home-improvement giant Home Depot (HD - Get Report)  and reiterated his outperform rating.

Analyst Brian Nagel also increased his price target for Home Depot competitor Lowe's (LOW - Get Report) to $145 from $135.

Shares of Home Depot were 8.8% to $16.78, while Lowe's were up slightly to $106.74.

Nagel told investors in a research note that he has kept his positive position on the two retailers for a number of reasons, including the company's still solid underlying demand dynamics. He also cited Home Depot's significant protections from the threat of online disintermediation, and accommodative share valuations.

"We are increasingly optimistic that a recent, meaningful moderation in mortgage rates should prove an incremental sales tailwind within the space and help support further the multiples at which HD and LOW trade," he wrote, adding the Home Depot's shares have performed well so far in 2019.

Nagel reiterated his nearer-term financial forecasts but warned that a "now stronger mortgage-rate-related tailwind could increase the chances for upside to these estimates."

In August, Home Depot reported second-quarter results that beat analysts' forecasts, though warned that future earnings growth will look less solid in part due to falling lumber prices and the potential impact of tariffs on consumer activity. The company is scheduled to report earnings on Nov. 12.

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