Lowe’s Companies NYSE: Low Price action pulled back from the October peak, providing a Second chance chance For investors. Opportunity to add positions or create new ones at a discounted price. Sharp results cause a pullback, but it is unlikely to be too deep given the company’s operating quality and outlook for next year. Headwinds remain for Lowe’s and other retailers, but its earnings report and other consumers show signs of resilience and strength. Reports from Lowe’s, home depot NYSE: HDAnd Walmart NYSE: WMT Make consumers feel shy about big-ticket projects. However, spending on small items is solidified and underpinned by digital Trade channel.
Lowe’s Companies Today
(as of 11/27/2024 ET)
- 52-week range
- $196.32
▼
$287.01
- Dividend yield
- 1.68%
- P/E ratio
- 22.78
- Price target
- $277.92
The takeaway is that Lowe’s revenue is contracting in 2024 but less than expected, and growth is expected to resume in 2025. Revenue is expected to grow at a low-single-digit pace, and the consensus figure is likely lower. Earnings growth will be more robust in 2025 and is critical to the capital return outlook. Lowe’s reduced the size of its share repurchases in 2024 to better align returns with its reduced cash flow. With increased cash flow, the company can pay down debt, reverse shareholder losses, and accelerate repurchase activity. The biggest opportunity is that low interest rates and Trump’s policies are expected to create tailwinds in 2025, and Lowe’s is well positioned to benefit from them.
Lowe’s beats expectations, raises guidance, shares fall
Lowe’s price pullback contradicts this Results and guidance, That beat MarketBeat’s reported consensus. The company’s $20.17 billion in net income was down from last year but only down 1.5%, beating consensus by 130 basis points. The strength was driven by positive comps in the Pro and Digital segments, and stormy demand helped the results. Still, CEO Larry Ellison noted that consumer demand for small-ticket projects remains high, helping boost sales.
Lowe’s Companies Stock Forecast Today
$277.92
Up 1.73%buy medium
Based on 25 analyst ratings
| High forecast | $310.00 |
|---|---|
| Average forecast | $277.92 |
| Less predictable | $240.00 |
Margin news is also mixed, with margins contracting but less than expected. The company reported an 80-basis-point contraction in gross margin and a smaller 25-basis-point contraction in net earnings margin, reducing adjusted EPS to $2.89 and down $0.17, or 5.5% year over year. However, adjusted EPS is also 350 basis points better than expected, allowing for a positive cash flow quarter, and clearing the outlook for balance sheet improvement and capital return.
The only bad news is that the pace of share buybacks has slowed down. The company spent just $0.758 billion in Q3 this year, compared to more than double last year but is still cutting the numbers. The 2024 activity has reduced the number by more than 3% and can be maintained at current levels. The dividend is safe at around 40% of this year’s earnings estimate and is expected to grow in 2025 at a low single-digit pace.
Lowe’s guidance is in line with analysts’ trends: undervalue
Lowe’s guidance is not strong, but full-year targets exceeded consensus figures. Analyst trends. Analyst trends include increases in revenue, earnings, sentiment, and stock targets, with sentiment strengthening to moderate buy and a consensus price target near $275. The $275 price target isn’t a huge gain, about 5% above the critical support target, but the bullish trend and the latest targets indicate a growing belief that the stock should trade near $300.
Price action in Lowe’s stock has been favorable despite falling more than 3.5% since the release. Action is favorable because it shows that the market is Buying stock Critical support is at the level and may not fall further. The critical support coincides with the peaks set in 2022 and earlier this year and is a target for strong support that is unlikely to be broken. With previous sellers expected to buy at this level now, chances are high that Lowe’s market will strengthen in the $260 to $280 range before moving to new highs sometime in 2025.
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