Barclays expects Home Depot, Lowe's Q2 results in line

Investing.com -- Barclays anticipates second-quarter results for Home Depot and Lowe's to align with consensus estimates despite ongoing housing market weakness and consumer uncertainty.

The investment bank stated that home improvement demand appears stable to slightly improving, which should support results that meet expectations. Sales are currently running slightly positive without significant housing market support, according to the note.

Barclays noted that spring was lackluster for housing. The firm said comparisons will ease and estimates appear reasonable for this year, with valuations remaining attractive.

Both stocks have returned toward their lows, which Barclays attributed to recent rate movements and the risk of further housing deterioration. The firm views this as creating an entry point.

Barclays highlighted that the gap between GDP and private residential fixed investment is at its widest since the post-COVID period and the last housing recession. The firm noted that Home Depot and Lowe's stock performance typically coincides with this metric.

The bank maintains an overweight rating on both companies. For Home Depot, Barclays cited progress in its professional customer segment and relative value compared to other segment leaders. For Lowe's, the firm noted the stock trades at 15-16 times fiscal 2027 earnings estimates.

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