Home improvement retailer Lowe's Companies, Inc. (NYSE: LOW) reported fourth-quarter results Wednesday morning that were highlighted by an earnings beat, but sales came in slightly lower than forecasted.
Nagel: Lowe's Catching Up To Home Depot
Lowe's reported its comps rose 1.7 percent in the fourth quarter, which fell short of the 2.1 percent expected. But comps in U.S. stores were up 2.4 percent, which is lower than the 3.7-percent comp growth Home Depot Inc (NYSE: HD) showed in its fourth-quarter results Tuesday.
The 1.3-percentage point spread between the rival retailers is "the narrowest it has been in a while," Oppenheimer's Brian Nagel told CNBC in an interview.
Home Depot is still the better performer among the two, but the Lowe's report shows it has "caught up a bit," the analyst said. It is possible that Lowe's internal initiatives — spearheaded by new CEO Marvin Ellison, who also happens to be an ex-Home Depot executive — are contributing to recent momentum, he said.
Why It's Important
The Home Depot and Lowe's earnings reports come at a time when investors appear to be "too concerned" about traditional housing metrics, which are coming in weak, Nagel told CNBC.
The bigger driver of the home improvement retail sector hinges on other metrics like consumer spending, employment and wage growth, in his view.
Lowe's said recorded a comp gain of 5.8 percent in January, which represents a "nice acceleration" into the second quarter, Nagel said, adding that investors should view the earnings report positively.
Home Depot And Lowe's Remain Sturdy Stocks, Raymond James Says
Wedbush On Lowe's: 'A New Day' Has Arrived
Photo via Wikimedia.
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|Feb 2019||Credit Suisse||Maintains||Neutral||Neutral|
|Feb 2019||Deutsche Bank||Maintains||Buy||Buy|
|Feb 2019||Telsey Advisory Group||Downgrades||Outperform||Market Perform|
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