Lowe’s missed both earnings and revenue estimates just days after competitor Home Depot topped Street forecasts and raised its fiscal-year guidance.
“I think the real key here to keep in mind is that this reflects Lowe’s issues and not some type of weakening in home improvement demand, because I think home improvement demand is actually picking up quite nicely,” Nagel said.
Peter Keith, a senior research analyst at Piper Jaffray, also sees housing strength.
“We do remain bullish on the housing cycle,” he said.
Lowe’s is currently in the middle of a shift in strategy from holding many promotions in favor of “everyday low prices,” a transition that has inadvertently pushed some shoppers away.
“But I think we have to remember they are in a fairly significant turnaround here — a bit of a state of flux, and it’s hard to really get confidence in investing in shares here when the fundamentals just aren’t picking up as we would have expected,” Keith said.
Keith has a “neutral” rating on the company’s shares, along with a $28 price target.
The disappointing report contrasts with Home Depot, which delivered what Keith said was a “great quarter.” He added that Home Depot is clearly gaining market share. (Read More: Home Depot Earnings Beat Forecasts, Ups Guidance.)
—By CNBC.com's Katie Little; Follow Her on Twitter @katie_little.
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Peter Keith does not own shares of Lowe’s. Disclosure information wasn’t available for Brian Nagel.