Lowe's (LOW) continues to face challenges in the do-it-yourself segment amid a struggling home improvement market and weak consumer discretionary spending, Wedbush Securities said in a note Wednesday.
Lowe's DIY segment accounts for about 75% of its sales, higher than Home Depot's (HD) estimated 52% exposure, according to Wedbush.
"We remain concerned that [Lowe's] DIY comps at an estimated -4% continue to materially underperform [Home Depot], particularly on a two-year stacked basis," Wedbush analysts said in the note.
Lowe's reported Q3 earnings and revenue that beat analyst expectations but didn't match Home Depot's strong performance, the investment firm said. While Lowe's new loyalty program is doing well, the company needs to continue its strategy of offering everyday low prices, Wedbush said.
Lowe's is expected to see higher sales and profits when interest rates decrease and the housing market recovers, possibly in H2 2025, the analysts said. Lowe's is expected to share multiple financial outlooks based on the timing and path of the housing and home improvement market's recovery in an analyst meeting on Dec. 11, according to the note.
Wedbush maintained a neutral rating on Lowe's stock with a $250 price target.
Price: 262.30, Change: +3.04, Percent Change: +1.17
Comments