Leading home improvement retailer Lowe's Companies (NYSE: LOW) will report second-quarter financial results before the market opens Tuesday.
Here's a look at what analysts are expecting from the company and key aspects to watch.
Earnings Estimates: Analysts are expecting Lowe's Companies to report second-quarter revenue of $24.99 billion, according to estimates from Benzinga Pro.
The company reported revenue of $27.48 billion in the second quarter of last year and reported revenue of $22.35 billion in the most recently reported first quarter.
Lowe's has missed revenue estimates from analysts in three of the last five quarters.
Analysts expect Lowe's to report earnings per share of $4.49 in the second quarter. The company reported earnings per share of $4.67 in last year's second quarter and reported earnings of $3.67 per share in the first quarter of the current fiscal year.
Lowe's has beaten earnings per share estimates from analysts in the past 10 straight quarters.
What Analysts Are Saying: Home improvement retailers Home Depot (NYSE: HD) and Lowe's were both downgraded by Telsey Advisory Group earlier this month from Outperform to Market Perform, as reported by Investing.com
Home Depot and Lowe's could "experience a slightly steeper slowdown related to the weak housing market trends, consumers remaining cautious with spending, especially on big-ticket items and projects, and continued normalization from the strong COVID-19 and government stimulus-related gains from past three years," analyst Joseph Feldman said.
Here's a look at other recent analyst ratings and price targets for Lowe's ahead of earnings.
- Oppenheimer analyst Brian Nagel had an Outperform rating and a price target of $275.
- Citigroup analyst Steven Zaccone had a Neutral rating and raised the price target from $221 to $250.
- Truist analyst Scot Ciccarelli had a Buy rating and raised the price target from $229 to $249.
- Wedbush analyst Seth Basham had a Neutral rating and raised the price target from $210 to $230.
- Argus Research analyst Chris Graja had a Buy rating and raised the price target from $250 to $260.
The second-quarter earnings report from Lowe's comes a week after rival Home Depot reported. The results of Lowe's will likely be heavily compared to Home Depot, a company that has a market capitalization of more than twice that of Lowe's.
Home Depot beat analysts' estimates for revenue with a sales decline of 2% year-over-year. The company's earnings per share also beat analysts' estimates.
In the second quarter, Home Depot said it saw an increase in spring sales and strength in smaller ticket projects as the weather improved.
The average ticket size was up year-over-year for Home Depot at $90.07, a key item investors will likely be watching for Lowe's. Home Depot said that it saw pressure on big-ticket items, another key item for investors to watch.
Analysts were impressed with the results from Home Depot, which could put pressure on Lowe's or bode well for the competitor, depending on how investors look at it. Of the analysts tracked by Benzinga for Home Depot, 13 reiterated their ratings after second-quarter results and all 13 raised their price targets.
With investors potentially picking between Home Depot and Lowe's, investors will also likely monitor news of stock buybacks. Home Depot announced the authorization of a $15 billion share buyback, which will replace its existing plan.
Home Depot shares currently have a higher dividend yield than Lowe's, which could put pressure on the company to raise its dividend or follow with a large share buyback of its own.
Benzinga previously reported on the traffic patterns of customers that visit Home Depot and Lowe's, with both companies looking to cater to professional customers.
Other areas that investors and analysts may monitor from the second quarter include customer transactions per ticket, shifts to do-it-yourself projects over professional services, the backlog of professional services and any trade-downs to cheaper products.
LOW, HD Price Action: Lowe's shares trade at $217.91 versus a 52-week trading range of $176.62 to $237.21. Shares of the company are up 0.9% in the last year and up 9.7% year-to-date in 2023.
Home Depot shares trade at $325.07 versus a 52-week trading range of $265.61 to $347.25. Shares of Home Depot are up 3.8% in the last year and up 2.6% year-to-date in 2023.