An uncertain housing market and added competition helped drive Stifel’s Sell downgrade of Lowe’s (NYSE: LOW), while investment needs could add pressure to the retailer’s balance sheet.
Stifel expects affordability pressures to discourage households from moving or undertaking home-improvement work. Separately, rising supply-chain costs and manufacturers’ higher prices could squeeze Lowe’s margins.
Stifel said a weaker-than-expected performance by Lowe’s specialty-trade business could weigh on the retailer’s comparable sales in the fourth quarter. It viewed October remarks from Lowe’s and Home Depot as mixed and expects the home-improvement market to stay weak.
