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June 27, 2020, 9:36 a.m. EDT

Home improvement projects are underway during COVID-19 with millennials spending the most, says Bank of America

This is good news for Lowe’s, Tractor Supply and Sherwin-Williams

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By Tonya Garcia, MarketWatch

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“We believe that both Home Depot and Lowe’s are well positioned in the current environment and beyond, as we expect home-related retail trends to stay strong for some time,” wrote analysts led by Michael Baker.

Instinet rates both companies buy. Home Depot’s price target was moved up $10 to $266, and Lowe’s price target increased to $146 from $130.

Home Depot shares are up 34.3% over the past three months, and Lowe’s has skyrocketed 56% for the period.

Other companies are reaping the benefits from the home improvement boom. Scotts Miracle-Gro Inc. /zigman2/quotes/200553749/composite SMG -1.97%   announced an upward revision of its guidance for the fiscal year ending September 30, with the company now expecting sales growth of 16% to 18%. Previous guidance was for 6% to 8% growth.

“An unprecedented number of consumers planting and maintaining gardens has led to a nearly 40% increase in consumer purchases of Miracle-Gro branded soils and more than 30% increase in plant food,” said Jim Hagedorn, chief executive of Scotts Miracle-Gro, in a statement.

“We’ve seen a more than 50% increase in purchases of Ortho outdoor pest control products and nearly 40% increase in indoor products. In fact, with the exception of mulch – which is gaining ground but still lagging last year due to a lack of retailer promotions – we have seen strong growth in every category this year.” That stock is up 31% over the past three months.

And on Wednesday, Sherwin-Williams Co. /zigman2/quotes/210069062/composite SHW -1.45%   raised its second-quarter sales guidance.

“Sharp increases in domestic do-it-yourself (DIY) paint demand during a period of shelter-in-place initiatives in 2Q 2020 is leading to much better than expected sales results in Sherwin-Williams’ Consumer Brands Group and in the Americas Group businesses,” wrote JPMorgan.

Analysts rate Sherwin-Williams stock neutral and raised their price target to $555 from $520.

Sherwin-Williams shares have gained 26.2% over the last three months.

The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.15%   is up 24.1% over that period.

$ 226.21
-4.55 -1.97%
Volume: 358,915
Jan. 26, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$12.85 billion
Rev. per Employee
$ 723.64
-10.64 -1.45%
Volume: 437,827
Jan. 26, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$66.69 billion
Rev. per Employee
-5.74 -0.15%
Volume: 2.56B
Jan. 26, 2021 5:17p

Tonya Garcia is a MarketWatch reporter covering retail and consumer-oriented companies. You can follow her on Twitter @tgarcianyc. She is based in New York.

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