Lowe's Q1 Earnings Preview: Can Home Improvement Retailer Shine After Home Depot's Mixed First Quarter?

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Home improvement retailers Lowe's Companies Inc (NYSE: LOW) will report first-quarter financial results before the market open on Tuesday.

Here are the earnings estimates, what analysts are saying and key items to watch.

Earnings Estimates: Analysts expect Lowe's to report first-quarter revenue of $21.10 billion, according to data from Benzinga Pro.

The revenue estimate is lower than the $22.35 billion reported in last year's first quarter by the home improvement retailer. Lowe's has beat revenue estimates in five of the last 10 quarters, with five quarters coming in below analysts' estimates.

Analysts expect Lowe's to report first-quarter earnings per share of $2.93 compared to $3.67 reported in last year's first quarter.

What Analysts Are Saying: While there could be many items analysts are watching in Lowe's first quarter report, JPMorgan analyst Christopher Horvers calls out the upcoming spring season.

The analyst sees increasing demand for outdoor patio items, which could benefit Lowe's. Horvers said Lowe's has more exposure to seasonal categories compared to rival Home Depot (NYSE: HD).

"DIY is 75% of their business. A big chunk of that is driven off these seasonal categories," Horvers said.

Here are other analyst ratings on Lowe's and their price targets.

  • Evercore ISI: In-Line rating, raised price target from $245 to $250
  • Stifel: Hold rating, raised price target from $225 to $250
  • Citigroup: Neutral rating, lowered price target from $243 to $240
  • Gordon Haskett: Downgraded from Accumulate to Hold, $245 price target
  • Truist: Buy rating, raised price target from $258 to $271
Key Items to Watch: One of the key items to watch could be foot traffic. A recent third-party report from Placer.ai showed visits to Lowe's down 4% year-over-year in the first quarter. Home Depot recently reported visits were down 1.1% in the first quarter.

If this data is correct, it could point to worse results for traffic for Lowe's versus its main peer company.

Home Depot reported first-quarter revenue of $36.42 billion, down 2.3% year-over-year. The revenue total missed an estimate of $36.67 billion from analysts. Home Depot's first quarter earnings per share of $3.63 beat estimates from analysts of $3.59.

Another item to watch in Lowe's report and prepared remarks could be a partnership with delivery company DoorDash (NYSE: DASH). In April, the retailer announced a partnership with DoorDash to provide delivery from over 1,700 stores in the U.S.

"Just in time for spring, consumers can shop for everything from gardening tools to spring cleaning essentials," DoorDash VP of New Verticals Fuad Hannon said.

The partnership marked the first in the home improvement category for DoorDash.

Lowe's previously guided for fiscal 2024 sales to be in a range of $84 billion to $85 billion. The company reported sales of $86.4 billion in last year's full fiscal year. An update on guidance for the full year or for the second quarter is another item to watch.

LOW Price Action: Lowe's shares trade at $230.50 versus a 52-week trading range of $181.85 to $262.49. The stock is up 11.3% over the last year and up 3.6% year-to-date in 2024.

Lowe's stock is beating Home Depot on a year-to-date basis (-1.9%), but trails the home improvement retailer's one-year return of 16.3%.

Both home improvement retailers trail the one year and year-to-date returns of the S&P 500 of 27.9% and 11.8%, respectively.