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Home Improvement Stock Volatility: What Does It Mean?

In the early days of COVID-19 lockdowns, many home improvement companies, from Pool Corporation (NASDAQ: POOL) to Home Depot (NYSE: HD), saw their stock climb. People were determined to make the most of the homes where they were confined, increasing their living space by making outdoor improvements. But the share prices for major outdoor living product companies, including Pool, Azek (NYSE: AZEK) and Trex (NYSE: TREX), have begun to fluctuate noticeably in recent months — no longer riding the steady “stay-home stock” tailwind they were in during the first six months of the pandemic.

What does this volatility indicate?

Conceivably, the jagged rises and drops in stock prices could correlate with ever-changing, unpredictable changes in COVID-19 community rules and future forecasts. If nothing is certain — including income, school schedules, or vaccine rollout — it’s hard to invest heavily in long-term improvement projects.

Why landscape and home improvement

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Forget Lowe’s, Home Depot Is a Better Home-Improvement Stock

The home-improvement industry has been surging as the coronavirus pandemic has forced so many people to spend more time at home. Not only are they noticing more projects that need to be done, but since the home now needs to be an office, a school, and an entertainment center, they need to upgrade or overhaul existing spaces. On top of all that, data shows that more families are deciding to move out of cities and into suburbs — which means out of apartments and into houses.

While the changes in consumer behavior during the pandemic were good for the home-improvement industry overall, some companies are better equipped to take advantage than others. Here is why Home Depot (NYSE:HD) is a better way to invest in this change than Lowe’s (NYSE:LOW)

A Home Depot storefron.

Image source: Home Depot.

Prospects 

The outlook is bright for both Home Depot and Lowe’s,

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Home Depot, Inc. (The) (HD) Stock Forecasts

Summary

Home Depot is the world’s largest home improvement retailer, with sales of $110 billion for the fiscal year ended February 2, 2020. The company, which is based in Atlanta, sells appliances, tools, paint, lumber, plumbing and electrical, garden and other home-improvement supplies in warehouse-sized stores that average 105,000 square feet. About 31% of sales came from plumbing, electrical and kitchen; 29% from hardware and seasonal; 21% from building materials and 19% from paint and flooring. The company’s total selling space is about 238 million square feet. At the end of FY20, Home Depot had 2,291 stores. Approximately 28% of U.S. stores are in California, Florida and Texas. About 8% of the stores are in Canada and 4% are in Mexico. Online sales represented almost 8% of the FY19 total, up from about 7% at the end of FY18.

The company’s fiscal year ends on the Sunday nearest

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Which Stock Looks Stronger After A Stellar Q2?

The pandemic restricted people to their homes and many made the best of this opportunity by remodeling their homes and taking up pending home improvement projects. The recent blockbuster results of home improvement retailers Home Depot and Lowe’s clearly indicated the shift in consumers’ discretionary spending from apparel buying and restaurant dining to home goods.

Using the TipRanks’ Stock Comparison tool, we will place the two home retailers alongside each other to see which stock offers the most compelling investment opportunity right now.

Home Depot (HD)

Home Depot, which operates 2,293 stores, benefited immensely from the rise in demand from DIY (do-it-yourself) customers as they took up deck building, painting, and home repairs amid the pandemic. Sales to Pro customers grew double digits.

The company’s sales for the fiscal second quarter (ended August 2) rose 23.4% to $38.1 billion as overall comparable sales or comps surged 23.4% with

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Wall Street Weighs In On Home Depot’s Blowout Q2, BofA Upgrades Stock

Home Depot Inc (NYSE: HD) was one of several major retailers to report blowout second-quarter earnings this week, sending the home improvement stock soaring.

Home Depot posted second-quarter EPS of $4.02 on $38.05 billion in revenue Tuesday. Both numbers topped consensus analyst estimates of $3.71 and $34.53 billion, respectively. Revenue was 23.4% higher year-over-year.

U.S. same-store sales rose 25%, and Home Depot’s average purchase amount was up 10.1%. It was the first quarter of double-digit same-store sales growth for Home Depot in more than seven years.

Several analysts weighed in on the stock following the impressive print. 

Long-Term Tailwinds For Home Depot: BofA Securities analyst Elizabeth Suzuki said it’s not too late to buy Home Depot shares to capitalize on the shelter-in-place environment.

“Although home improvement spending in the coming quarter may decelerate amidst sequentially declining government stimulus/unemployment benefits, we believe that the longer-term tailwinds for the home improvement

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