Home Depot, Lowe’s stocks downgraded

Colin McGranahan, an analyst at Bernstein Research in New York, has downgraded home goods-related stocks, including Home Depot, Lowe’s and Williams-Sonoma.

McGranahan wrote in a note to investors Monday that their upside as the retail market improves will pale in comparison to other “overweight” stocks. He downgraded the stocks from “outperform” to “market weight.”

He noted these stocks had outperformed their peers in 2008, benefiting from better-managed inventories and margins. Their stock prices improved from previous lows.

But these stocks “could pale in a true economic recovery.”

“History would strongly suggest that the window for buying ‘retail’ en masse is closing,” he wrote.

After the report came out, Home Depot’s stock closed at $24.93 on Monday, a 57-cent drop from the previous close.