Investing.com -- Bank of America on Tuesday reinstated coverage of Home Depot and Lowe’s at Buy and Neutral, respectively, pointing to Home Depot’s greater exposure to professional contractors as a key differentiator in a still-subdued housing market.

The bank set a price target of $374 for Home Depot and $260 for Lowe’s.

Speaking broadly, BofA analysts said the home improvement sector is awaiting a housing recovery that has yet to materialize, with existing home sales running well below their long-term average and mortgage rates keeping many homeowners on the sidelines.

Home Depot’s Pro segment, which accounts for roughly half of its retail sales, has delivered five consecutive quarters of positive comparable sales and is seen as more resilient than the do-it-yourself market in the current environment.

"HD is our preferred stock within the home improvement sector; we think HD’s comp growth will outperform driven by higher Pro penetration and expect traffic trends will hold up better than peers as we move past industry-wide price increases in 2H," analysts Christopher Nardone and Madeline Cech said in a note.

BofA’s own aggregated credit and debit card data showed Home Services spending — used as a proxy for professional activity — running at +3.3% for the fiscal first quarter to date, compared with a decline of 0.8% for home improvement retail, a proxy for DIY demand.

The analysts also pointed to Home Depot’s recent acquisitions, SRS Distribution and Gypsum Management Supply, as potential earnings drivers once roofing volumes normalize.

Roofing shipments were severely depressed in 2025 amid an absence of major hurricanes and tough year-over-year comparisons. "We view 2025 roofing and complex Pro demand as trough-like, with normalization driving incremental upside," they wrote.

For Lowe’s, the analysts acknowledged the company’s progress in lifting its Pro mix from around 19% in 2019 to roughly 30% today, and said recent acquisitions of Foundation Building Materials and Artisan Design Group signal a serious push into the complex Pro customer segment.

However, with DIY still representing 70% of Lowe’s sales, the analysts said a broader improvement in consumer and housing conditions is needed before a more constructive view is warranted. "The backdrop for DIY needs to improve for us to turn more positive on a sales acceleration cycle," they said.

BofA also flagged that Lowe’s recent comp recovery has been driven more by pricing and ticket size than by volume, with customer transactions declining between 3% and 5% for the past three years. Once tariff-related price increases are lapped in the second half of 2026, sustaining comparable sales growth could prove challenging.

Home Depot shares are at a five-year relative trough versus Lowe’s on a forward price-to-earnings basis, which the analysts view as a compelling entry point.