Jefferies Reiterates Buy on Lowe's and the Home Depot

Jefferies reiterated its Buy rating on the Home Depot HD and Lowe's LOW in spite of lowering its earnings per share estimates on both companies. In a research report published today, Jefferies stressed it prefers Home Depot to Lowe's. In the report, Jefferies states, "We still prefer HD shares over LOW on weakness, but believe housing data points should improve as we lap the affects of government stimulus a year ago. Starting in July of 2010, housing turnover deteriorated as the last of the home sales closed under the stimulus program in June of 2010. The industry will soon face easier comparisons and we expect y-y changes to improve, which could provide a better news backdrop and a stronger performance for both stocks." On Tuesday, Lowe's added 3.04% to its value to close the day at $22.72. At the same time, the Home Depot added 4.48% on Tuesday to end the day at $34.75. Its shares retreated a bit in today's pre-market trading, however, sliding 0.12% to $34.71.