Lowe’s Posts Strong Q3 Results, But Stock Sees Dip

Lowe’s Companies, Inc. (LOW) is a leading home improvement retailer situated in Mooresville, North Carolina. The company offers products spanning construction, maintenance, repair, remodeling, decorating, and more. With a market capitalization of $147.1 billion, Lowe’s operates over 1,700 stores throughout the United States.

Stock Performance Behind Market Norms

Over the past year, Lowe’s shares have not performed as well as the wider market. In the last 52 weeks, LOW has increased by 28.7%, which falls short of the S&P 500 Index’s returns of 30.1%. While Lowe’s gained 18.2% in 2024, the S&P 500 advanced by 24.1% during the same period.

When looking more closely, Lowe’s has outperformed the Consumer Discretionary Select Sector SPDR Fund (XLY), which reported a gain of 27.8% over the same timeline, although it trails behind the ETF’s year-to-date (YTD) growth rate of 20%.

Financial Results and Future Outlook

After releasing its third-quarter results, Lowe’s shares fell by 4.6% on Nov. 19. The company reported an adjusted profit of $2.89 per share, surpassing the $2.82 expected by Wall Street. Additionally, Lowe’s generated $20.17 billion in revenue, exceeding the predicted $19.96 billion. The retailer forecasts full-year earnings between $11.80 and $11.90 per share, with projected revenue between $83 billion and $83.5 billion.

For the fiscal year ending January 2025, analysts are estimating an EPS of $11.82 for Lowe’s, marking a 10.5% decline from the previous year. However, the company’s impressive history of earnings surprises—having exceeded consensus estimates in each of the last four quarters—offers some optimism.

Analyst Sentiment Shifts Toward Bullish

Among the 31 analysts monitoring LOW stock, the consensus rating stands at “Moderate Buy,” comprising 19 “Strong Buy” ratings, one “Moderate Buy,” and 11 “Holds.” This is an improvement from a month ago when only 17 analysts had issued “Strong Buy” ratings.

On Nov. 20, Truist Securities raised its price target for Lowe’s to $310 from $307 while maintaining a “Buy” rating. This adjustment came in light of Lowe’s solid third-quarter performance, which aligned with Truist’s revised forecasts, boosted by strong sales from professional contractors and storm recovery efforts. Despite ongoing challenges with big-ticket items, Truist remains optimistic, citing a stable economy and the health of home equity as positive indicators for continued home improvement activity.

Currently, Lowe’s average price target is $274.12, indicating a potential increase of 4.2% from its current price. The highest price target stands at $323, suggesting a possible upside of 22.8%.

On the date of publication, Kritika Sarmah did not hold positions in any of the securities mentioned in this article. All information provided herein is for informational purposes only. For further details, please refer to the Barchart Disclosure Policy.

The views and opinions expressed in this article reflect those of the author and do not necessarily represent those of Nasdaq, Inc.