But the company is starting to see improvement in some of the hardest-hit housing markets, including California, Florida and parts of the southwest. For the fourth quarter, management expects earnings in the range of 9 cents to 13 cents a share, possibly beating the 10 cents Wall Street forecasts. The company predicts a full-year profit between 1.16 to $1.20 per share, while analysts expect $1.20 per share. "With the consumer showing signs of life in the more decorative and discretionary categories, we think this favors Lowe's over Home Depot," J.P. Morgan analyst Christopher Horvers wrote in a note. Horvers expects Lowe's to get back the gross margin deterioration it saw in the fourth quarter last year due after resorting to markdowns. And Wall Street Strategies analyst Brian Sozzi says Lowe's, from a valuation perspective, is valued at a discount to Home Depot. The stock is also discounted to its 10-year normalized averages, he wrote in a note.