Home-improvement stocks have been on the rise. As the pandemic keeps many Americans in their houses and apartments—using their living spaces as home offices, gyms and art studios—more are interested in upgrading their spaces.
Another strong round of earnings from Home Depot Inc. and other home stocks is indicative of the trend. As of Friday, shares of Home Depot are up 29.7% since the start of the year, and shares of Lowe’s Cos . are up 35% in the same period. The S&P 500 is up 5.1% in the same period.
“I’ve been in this space for 17 years, and this environment is not one I’ve seen before,” said Seth Basham, specialty retail analyst at Wedbush Securities. “I think we’ll see this trend persist into 2021, the longer Covid persists as a problem. The stock will just continue to skyrocket.”
While these stocks aren’t getting upgraded, many have already bet on home-improvement stocks and are watching the trend with interest.
According to Joseph Feldman, senior managing director and assistant director of research at the Telsey Advisory Group, many investors have seen this trend coming. “I have heard a lot of people asking, ‘Is this as good as it gets?’ ” he said. “I am not so sure. I think there is more life for both the sales growth and these stocks.”