Oppenheimer Analyst Breaks Down Lowe's Q3 Report

Lowe's Companies, Inc. (NYSE: LOW) reported third quarter results Tuesday that consisted of a top- and bottom-line beat and a reiteration of its full year fiscal 2017 guidance.

The Analyst

Oppenheimer's Brian Nagel.

The Thesis

Overall, Lowe's reported a "good quarter," but the problem is the company's results are often compared to its much larger rival, Home Depot Inc (NYSE: HD), Nagel said during CNBC's "Squawk Box" segment. (See Nagel's track record here.) 

During the third quarter, Lowe's reported a 5.7 percent comp increase, which is a "good number" on its own, but falls short of Home Depot's 7.7 percent comp increase in the same third quarter, Nagel said. 

The company's full-year comp guidance of 3.5 percent implies that Lowe's benefited in the quarter from hurricane-related sales, the analyst said. The retailer maintained its full-year guidance despite recording a beat in the third quarter, but investors shouldn't read too much into this, Nagel said. 

"They beat in Q3, they didn't raise guidance," he said. "I don't know if I would necessarily read into that they are expecting some kind of slowdown. That probably implies they are trying to set the bar a down a little bit lower for themselves and hopefully beat results again."

Price Action

Shares of Lowe's were trading lower by nearly 2 percent ahead of Tuesday's market open.

Related Links:

Home Deport Surrenders Most Of Tuesday's Gains

Lowe's Earnings Report Shows It's No Home Depot

Photo courtesy of Lowe's.