Nomura Securities Cuts Numbers on Lowe's (LOW) and Home Depot (HD) Ahead of Upcoming Results

August 7, 2012 11:27 AM EDT
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Analyst Nomura Securities trimmed their price targets and estimates on home improvement retailers Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) ahead of upcoming earnings. Home Depot is due to report Q2 EPS on August 14 and Lowe's on August 20.

"Given tepid feedback from suppliers and others, we feel it is appropriate to lower LOW estimates and target. We are also modestly reducing our estimates for HD to reflect more recent trends," analyst Aram Rubinson comments. "Investors have been rewarded for investing in the best-in-class operator. We think merchandising is at the heart. We measure merchandising with a proprietary survey. LOW fared poorly in our initial survey. HD fared well in both surveys. We would have done better to side with HD thus far, but we think time is on LOW’s side and remain Buy rated."

The firm cut its price target on Lowe's from $37 to $34, 2Q12E EPS from $0.73 to $0.68F12E EPS from $1.94 to $1.86; F13E EPS from $2.58 to $2.25.

On Home Depot, the firm cut its price target from $55 to $54, 2Q12E EPS from $1.00 to $0.98; F12E EPS from $3.05 to $3.03; F13E EPS from $3.56 to $3.50.

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