Lowe’s Companies, Inc. (NYSE: LOW) is an American home improvement company that serves nearly 20 million customers per week. The company and its related business services are offered in retail stores across the US. Lowe’s, whose headquarters are in Mooresville, NC, aims to provide its customers with all the tools they need for repairs, maintenance, decorating, and remodeling. It is one of America’s FORTUNE® 50 companies.
Lowe’s Companies, Inc. Earnings Report
Lowe’s Companies, Inc. released its Q3 2023 earnings report on November 21, 2023. It reported a revenue of $20.5 billion for the quarter, a 12.8% decrease from Q3 last year when it reported $23.5 billion. The company reported an EPS of $3.06, a massive improvement from the $0.25 it reported last year. Lowe’s beat the analysts’ EPS estimate by 0.89% but fell short of revenue estimates by 1.87%.
It also reported that it opened one store for the quarter and three Lowe’s Outlet stores. Lowe’s reported that it operated 1,746 as of November 3, 2023, occupying 194.9 million square feet of retail space.
The company attributed the decline in comparable sales for the quarter to a decrease in DIY as people cut discretionary spending amidst macroeconomic pressure.
In the outlook section, the company projects total sales of $86 billion for FY23. That would be a 5% decline from FY22. Additionally, it projects an EPS of $13 for 2023.
LOW Stock Performance
Following the earnings report’s release, Lowe’s stock fell by around 3%. The drop came after a revelation that the company had experienced larger-than-expected cuts in spending on big-ticket tools. Following the November 21, 2023 decline, Low stock is down 0.49% year-to-date. However, the stock is still up 5.14% in the past 30 days.
Stock Price Forecast
Analysts give LOW stock a cautious moderate buy rating. They expect it to perform better than the stock market in the next 12 months. They have given the stock a high price target of $289 and a low of $194. Their average price target is $242.92, which is a 22.65% upside on the current price of $198.06.
Lowe’s Companies is one of the dividend kings. The company has paid and increased dividend payouts yearly for the past 51 years. For some investors, that might be a good fit. LOW might be a good option for those seeking a reliable income-generating stock. However, it might not necessarily be a great means of growing the size of your portfolio. For instance, while the company projects an EPS of $13 for FY23, the stock is still down 0.49% year-to-date.
The stock is trading close to its 50-day moving average of $200.17, a great metric for near-term stock performance. However, with 75% of sales coming from DIY, the stock might face tough times as customers cut discretionary spending.
Should You Buy LOW Stock?
When making investment decisions on stock in the Consumer Cyclical sector, macroeconomic factors are a significant consideration. If those factors change, the stock’s price will rise.
It is also worth looking into the company’s direction. For instance, the company reported that professional customers partially offset reduced sales from DIY buyers.
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