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Analyst: Balance to Upside for Home Depot, Lowe's

Despite risk of a double-dip and a 2% drop in construction spending in May, BMO Capital Markets upgraded both Home Depot and Lowe's Thursday. Wanye Hood, the analyst who made the call, spoke with the Fast Money desk about the upgrades.

Hood says Home Depot is down 24% from its 52-week high. Lowe's is down 28%. As a result, he thinks they have been oversold and it's more likely that they go higher. Hood crunched the numbers and at current levels, even if the economy goes into a double-dip recession, these valuations are still too low.

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