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Janney Montgomery Scott managing director David Strasser gives his outlook for Lowe’s and Home Depot stocks.
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Act you -- thanks so much -- -- -- set to report earnings tomorrow lows following with its report next week with home improvement supplies sales slumping.
How the stocks the impact -- joining -- -- -- Strasser.
Janney Montgomery Scott managing director of equity research in the retail sector covering both -- name's David welcome to you and I understand you downgraded.
Both close to Home Depot recently -- to do that did that basically we said I feel like sales have been sluggish Saddam particular Home Depot is gone expensive.
I mean both of them and particularly home -- run their businesses really well.
But you see it's it's a tough it's a tough neighborhood right now that that category -- housing -- -- a little bit better we'll see the sustainability of that.
And that could help in the back in the year back half of the year but -- it's getting it's getting worse not better in that group is it really just -- macro story affecting these companies.
Yet it I mean particularly on the votes -- -- -- you might my fears there macro mean those has also made an offer for company cannon called Verona.
And I think that's gonna can can weigh on the multiple little bit because it's been a big and capital return on invested capital story.
And now a big acquisition like this for potentially whether or not they get it done or not but it does cause some question marks.
Every quarter since into The Home Depot vs less comparison segment home -- tends to went out.
If you look at the stock price it's certainly one out but has anything really change -- let's -- -- -- strategies I think that you see that looks promising or.
Account both still we were I was in the stores last week -- on both Salt Lake City and Las Vegas and quite frankly.
Both will look pretty good on the store's look good.
There's issues people are not buying bigger ticket stuff and you know even if housing gets a little better still not -- not enough I don't think to really.
You know drive sustainable recoveries in these businesses which -- -- preferred.
Probably on Home Depot -- just a little nervous about you know this acquisition issue with flows I think he caps -- multiple near term interesting and -- -- what's your price chart which -- trajectory for them.
What might reject you for them is that I think they haven't they have a bit of a challenge.
You know -- I think the stock's very fairly -- where it is right now in the mid twenties.
Comments right -- price target you know right here and that field.
That that's you know it's a fairly valued stock a well run company but there's some question -- -- go -- these stories are telling us and they look really good you know what are people utilizing them for -- he's -- the -- due to better cater to -- drawing in customers.
I mean I think people are using a lot more for maintenance.
I'm seasonal was pretty good although seasonal we saw a lot more depth pulled forward into the first quarter because of this the really be early spring in the warm weather earlier in the year -- -- probably hurts and it's a timing issue more than anything in this quarter.
But mostly -- -- but the big ticket stuff is still seems to be a bit of a struggle.
Appreciated Davis faster -- now says.
