New York, NY, November 6, 2006--Shares of Home Depot and Lowe's could come under pressure in trading today after UBS downgraded the home improvement chains to reduce from neutral.
The broker said it is increasingly concerned that the weakness in the U.S. housing market will weigh significantly on their third-quarter results.
UBS said several home products manufacturers have recently highlighted weakening consumer demand.
Shifts in housing data, the broker said, typically take about six to nine months to filter through to the two companies' sales performance from same-store sales.
The firm cut its price target on Home Depot to $32 from $37 and on Lowe's to $24 from $30. On Friday, Home Depot shares ended unchanged at $37.20 while shares of Lowe's fell 42 cents to $29.05.
