/Lowe)
Mooresville, North Carolina-based Lowe's Companies, Inc. (LOW) operates as a home improvement retailer. It offers construction, maintenance, repair, remodeling, decorating, and home improvement products. With a market cap of $138.6 billion, the company operates over 1,700 physical stores spread across the US.
The home improvement retailer has underperformed the broader market over the past year. Over the past 52 weeks, Lowe’s stock is up 9.6% lagging behind the S&P 500 Index’s ($SPX) 28.1% returns. In 2024, Lowe’s gained 8% compared to SPX’s 17.3% gains on a YTD basis.
Narrowing the focus, LOW has also underperformed the S&P 500 Cons Disc Sector SPDR’s (XLY) 13.9% returns over the past 52 weeks but outpaced XLY’s 3.6% gains on a YTD basis.
Shares of Lowe's have lagged behind the broader market due to rising interest rates and inflation, pushing consumers to favor discretionary services over home upgrades. However, Lowe's is teaming up with tech giants like Apple Inc. (AAPL) and NVIDIA Corporation (NVDA), integrating augmented reality for product visualization and deploying robotics in warehouses, aiming to boost its retail experience and operational efficiency.
Most recently, on Aug. 20, the company unveiled its Q2 earnings report before the market opened, and LOW stock dipped marginally. The company’s net sales declined 5.5% year over year to $23.6 billion, missing Wall Street’s estimates. However, its adjusted EPS of $4.10 beat estimates by 3.5%. Moreover, the management also reduced its full-year total sales guidance from the previously announced $84 billion to 85 billion range, which it now expects to be between $82.7 billion and 83.2 billion.
For the current fiscal year, ending in January 2025, analysts expect Lowe’s to report an EPS of $12.14, down 8% annually. However, the company’s earnings surprise history is robust. It beat the consensus estimates in all of the last four quarters.
Among the 30 analysts covering the LOW stock, the consensus rating is a “Moderate Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and 14 “Holds.”
This configuration has been consistent over the past months.
On Aug. 20, Telsey Advisory Group analyst Joseph Feldman maintained a “Market Perform” rating with a price target of $230.
LOW’s mean price target of $247 represents a premium of 2.8% from current price levels. The Street-high target of $280 indicates a potential upside of 16.5%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
