Oppenheimer Sees Choppy Road Ahead for Home Depot, Lowe's

Home improvement retailers Home Depot and Lowe's may not show the expected rebound in their upcoming quarterly reports, according to investment bank Oppenheimer. The bank says the backdrop for home-improvement retailers still looks 'choppy,' and it doesn't expect the next set of results to signal a durable turn.

In a recent research note, Oppenheimer modeled Home Depot's second-quarter earnings per share at $4.66 with comparable sales flat to up 1%, below FactSet's consensus of $4.73 and 0.9% same-store sales growth. For Lowe's, it expects $4.24 in earnings per share and 1% comparable sales growth.

The bank also expressed less confidence that interest rates will fall meaningfully soon, which could keep big-ticket, project-driven spending muted. This could impact Home Depot's post-earnings move, as analysts lowering their forecasts after investors have already paid up may lead to a valuation reset, where the price slips to bring the multiple back down.