Also-Ran Lowe's Looks Undervalued

While third-quarter sales results at wide-moat

While this marks another quarter in which Lowe's business was not quite as robust as that of peer Home Depot (which put up comps of nearly 8%), the performance was still solid for a mature business that has room for positive sales growth in the brick-and-mortar space. We expect housing starts to rise from an estimated 1.22 million in 2017 to 1.55 million in 2019, bringing further demand for home-improvement projects as consumers move into these new locations and leave their current residences. Sustained turnover, still-low interest rates, and generally positive economic support (employment, home prices, confidence) should offer continued demand in the category over the next few years, supporting retailers like Home Depot and Lowe’s.

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