Lowe’s results look weaker than Home Depot, but consumer is in good shape – Oppenheimer

Oppenheimer analyst Brian Nagel said Wednesday that results from Lowe’s (NYSE:LOW) looked weaker than those released by rival home improvement retailer Home Depot (NYSE:HD) the previous day.

Still, the senior analyst at Oppenheimer told CNBC that financial figures from the retailing giants indicate that the “consumer is in good shape” despite headwinds from inflation and an uncertain economic environment.

“This home improvement consumer is actually holding up quite well,” he said.

Looking specifically at the latest results from the home improvement giants, Nagel characterized LOW’s earnings as “not a bad report” but classified it as “weaker” than the figures released by HD.

LOW reported mixed results for Q2. The company’s profits came in stronger than expected, even as revenues fell short. The company’s top-line figure was essentially flat with last year, coming in at around $27.5B. This was $680M below expectations.

The figures from LOW followed a quarterly report from HD released the previous day. HD beat on both its top and bottom lines, with revenue that climbed 7% from last year to reach $43.8B. The revenue total exceeded analysts’ consensus by $460M.

While there were some concerns about inventories at HD, which created a stumbling block for the stock early in Tuesday’s session, shares eventually pushed higher on the day. HD ended Tuesday with a gain of about 4%.

LOW rose along with its rival during Tuesday’s action, climbing about 3%. Following its quarterly report, the stock edged higher another 2% in Wednesday’s premarket action. HD ticked down fractionally before Wednesday’s open.

Longer-term, both LOW and HD are coming off 52-week lows reached in mid-June. Since that point, LOW has climbed about 25%, while HD has rebounded by 20%.

For more on HD, see why Seeking Alpha contributor JR Research has advised investors “don’t fear the housing market downturn.”

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