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Remodeling Surge to Benefit Home Depot, Lowe’s: Analyst

Piper Jaffray upgraded shares of Home Depot and Lowe's Cos. in anticipation of a surge in home-remodeling activity, analyst Peter Keith told CNBC Monday.

That pent-up renovation boom has nothing to do with declining home prices or the housing market in general, he said.

"There's a large home-remodeling cycle that's just beginning to develop," according to Keith. "The main driver to spending this year on big tickets was that people were tired of delaying projects."

A Piper Jaffray survey of 440 homeowners also found people are spending more on remodeling projects, and the amount they are spending for each project is going up.

"We found the median year-on-year increase for spending was $500," he said. "That's a pretty significant amount when you consider that the average spend year-on-year is only about $1,000 or $2,000."

The prospect of full parking lots at the local Home Depot or Lowe's

prompted the analyst to raise his rating on Home Depot to "overweight" from "neutral," and its price target to $62 from $47. On Lowe's, he raised the rating to "overweight" from "neutral," and the price target to $49 from $21.

Another View: Home Depot, Lowe’s Could See Lift, Analyst Says

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Trader disclosure: On Apr 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMC; Joe Terranova is long GS; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Steven Grasso is long CUBA; Steven Grasso is long GERN; Steven Grasso is long HPQ; Steven Grasso is long HSPO; Steven Grasso is long MU; Steven Grasso is long NAT; Steven Grasso is long NYX; Steven Grasso is long P; Steven Grasso is long PRST; Steven Grasso is long VVUS; Steven Grasso is long XRX; Steven Grasso is long ZNGA; Steven Grasso is long ORCL; Steven Grasso is long UAL; Steven Grasso is long LNG; Steven Grasso is short AAPL; Steven Grasso is short QQQ; Patty Edwards is long for clients AAPL; Patty Edwards is long for clients WFC; Patty Edwards is long for clients GDX; Patty Edwards is long for clients GLD; Patty Edwards is long for clients KMB; Patty Edwards is long for clients ERF; Patty Edwards is long for clients INTC; Patty Edwards is long for clients JOY ; Patty Edwards is long for clients SBUX; Patty Edwards is long for clients COP; Patty Edwards is long for clients AMZN; Patty Edwards is long for clients PEP; Patty Edwards is long for clients HD; Patty Edwards is long for clients BRK.B; Patty Edwards is long for clients JNJ; Patty Edwards is long for clients BMY; Brian Kelly is long SPY; Brian Kelly is long IWM; Brian Kelly is long USG; Brian Kelly is long KRE; Brian Kelly is long CAF; Brian Kelly is long GERMAN BUNDS; Brian Kelly is short EUROTOXX 50 FUTURES; Brian Kelly is short BRITISH POUND; Brian Kelly is short SWEDISH KRONE

For Doug Kass
Doug Kass is long XLF
Doug Kass is long BAC
Doug Kass is long C
Doug Kass is long BRK.B

For Sam Isaly
Sam Isaly is long JNJ
Sam Isaly is long ISRG
Sam Isaly is long PFE
Sam Isaly is long FRX
Sam Isaly is long LLY
Sam Isaly is long WLP
Sam Isaly is long PFE
Sam Isaly is long RHHBY
Sam Isaly is long NVS
Sam Isaly is long BMY
Sam Isaly is long SNY
Sam Isaly is long MRK

For JC O’Hara
Nothing to disclose

For Peter Keith
Piper Jaffray usually provides bids and offers for the securities of Home Depot, Inc. (The) and will, from time to time, buy and sell Home Depot, Inc. (The) securities on a principal basis: HD
Piper Jaffray usually provides bids and offers for the securities of Lumber Liquidators, Inc. and will, from time to time, buy and sell Lumber Liquidators, Inc. securities on a principal basis: LL
Piper Jaffray has received non-investment banking securities-related services from or has had a client relationship with Lowe's Companies, Inc. in the past 12 months: LOW
Piper Jaffray usually provides bids and offers for the securities of Lowe's Companies, Inc. and will, from time to time, buy and sell Lowe's Companies, Inc. securities on a principal basis: LOW

Trader disclosure: On Apr 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMC; Joe Terranova is long GS; Joe Terranova is long JOY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Steven Grasso is long CUBA; Steven Grasso is long GERN; Steven Grasso is long HPQ; Steven Grasso is long HSPO; Steven Grasso is long MU; Steven Grasso is long NAT; Steven Grasso is long NYX; Steven Grasso is long P; Steven Grasso is long PRST; Steven Grasso is long VVUS; Steven Grasso is long XRX; Steven Grasso is long ZNGA; Steven Grasso is long ORCL; Steven Grasso is long UAL; Steven Grasso is long LNG; Steven Grasso is short AAPL; Steven Grasso is short QQQ; Patty Edwards is long for clients AAPL; Patty Edwards is long for clients WFC; Patty Edwards is long for clients GDX; Patty Edwards is long for clients GLD; Patty Edwards is long for clients KMB; Patty Edwards is long for clients ERF; Patty Edwards is long for clients INTC; Patty Edwards is long for clients JOY ; Patty Edwards is long for clients SBUX; Patty Edwards is long for clients COP; Patty Edwards is long for clients AMZN; Patty Edwards is long for clients PEP; Patty Edwards is long for clients HD; Patty Edwards is long for clients BRK.B; Patty Edwards is long for clients JNJ; Patty Edwards is long for clients BMY; Brian Kelly is long SPY; Brian Kelly is long IWM; Brian Kelly is long USG; Brian Kelly is long KRE; Brian Kelly is long CAF; Brian Kelly is long GERMAN BUNDS; Brian Kelly is short EUROTOXX 50 FUTURES; Brian Kelly is short BRITISH POUND; Brian Kelly is short SWEDISH KRONE

For Doug Kass
Doug Kass is long XLF
Doug Kass is long BAC
Doug Kass is long C
Doug Kass is long BRK.B

For Sam Isaly
Sam Isaly is long JNJ
Sam Isaly is long ISRG
Sam Isaly is long PFE
Sam Isaly is long FRX
Sam Isaly is long LLY
Sam Isaly is long WLP
Sam Isaly is long PFE
Sam Isaly is long RHHBY
Sam Isaly is long NVS
Sam Isaly is long BMY
Sam Isaly is long SNY
Sam Isaly is long MRK

For JC O’Hara
Nothing to disclose

For Peter Keith
Piper Jaffray usually provides bids and offers for the securities of Home Depot, Inc. (The) and will, from time to time, buy and sell Home Depot, Inc. (The) securities on a principal basis: HD
Piper Jaffray usually provides bids and offers for the securities of Lumber Liquidators, Inc. and will, from time to time, buy and sell Lumber Liquidators, Inc. securities on a principal basis: LL
Piper Jaffray has received non-investment banking securities-related services from or has had a client relationship with Lowe's Companies, Inc. in the past 12 months: LOW
Piper Jaffray usually provides bids and offers for the securities of Lowe's Companies, Inc. and will, from time to time, buy and sell Lowe's Companies, Inc. securities on a principal basis: LOW



CNBC.com with wires.

Symbol
Price
 
Change
%Change
HD
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LOW
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