Lowe's Companies, Inc. (LOW)

sleepyseth (99.07) Submitted: 11/01/06 2:06 PM : Start Price: $29.34 LOW Score: 20.84

I think that the weakness in the housing market is going to affect this company more than people think. The housing market is not turning a corner as some experts claim. These people probably just want to take credit for guessing the bottom, with no real evidence, just hoping to be lucky. These people are all extremely early. We experienced a bull market that saw 10 years of price appreciation in only a few years in some markets. Prices have only just begun to pull back. Despite what people on here might say, spending on home improvements will decrease significantly as people feel like they are loosing money on their real estate. The hoard of real estate speculators, buying multiple houses with nothing down and upgrading everything to make a quick profit will completely dry up and that will significantly impact the bottom lines of both LOW and HD. While some people will still upgrade their homes, without the same appreciation to the values of their houses, the upgrades will slow with regular customers also.
I also would like to make a comment that many people on here will probably disagree with. I think that Home Depot has a better brand. Granted, Lowe's might have a better brand on wall street and with investors, but I think that Home Depot still has a much stronger brand with consumers. It is still the place most people think of first in this market. Also, everyone seems to agree that Lowe's has better management, and I am certainly not saying that bad management can't ruin a company and good management can't make all the difference, I just think that Home Depot's current stronger brand recognition with the consumer might help it a lot in the downturn. I am negative on both for at least a year.

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