Lowe's Companies Inc
The results came amid an exciting earnings season. Here are some key analyst takeaways.
Goldman Sachs On Lowe's Companies
Analyst Kate McShane reiterated a Buy rating, while raising the price target from $250 to $268.
Lowe's comps improved sequentially throughout the quarter and management expects comps to remain flat in the second quarter and improve in the back half of the year, McShane said in a note. The company generated better-than-expected seasonal sales in the first quarter, he added.
Lowe's delivered positive Pro comps, "despite continued macro pressures as the company's focus on improving the Pro customer experience is paying off," the analyst wrote. The company's gross margin is expected to recovery in the back half of the year, he further stated.
Truist Securities On Lowe's Companies
Analyst Scot Ciccarelli reaffirmed a Buy rating, while reducing the price target from $271 to $265.
Lowe's comps came in lower by 4.1% in the first quarter, which was better than expectations of a decline of around 5.0%-6.0%, Ciccarelli said. Truist Card Data suggests an improvement in March and April after adjusting for the Easter shift, he added.
Pro comps were positive, versus flat in the previous quarter, while DIY sales remained under pressure due to "lower demand for bigger-ticket discretionary products," the analyst wrote. "We continue to believe it is a matter of 'when' not 'if' sales accelerate, as people invest in their existing homes rather than purchasing something else (golden handcuffs) and/or simply adjust to higher rates," he further stated.
DA Davidson On Lowe's Companies
Analyst Michael Baker maintained a Neutral rating, while cutting the price target from $270 to $240.
The macro environment remains "unfavorable for the home centers," with home turnover remaining 26% below pre-pandemic levels and industry data showing the fifth straight quarter of negative trends, Baker said.
He added, however, that Lowe's is "executing better than in the past, which has shown up in better than expected comps this quarter." The macro environment will improve at some point, and "the improvement that LOW has made over the past 6 years will enable a resumption of the margin expansion story," the analyst stated.
BofA Securities On Lowe's Companies
Analyst Robert Ohmes reiterated a Buy rating and price target of $280.
Lowe's reported earnings of $3.06 per share, beating the consensus of $2.95 per share, on a lower-than-expected decline in comps, Ohmes said. "While DIY big-ticket discretionary spending remained challenged (big-ticket sales declined (7.6%) in F1Q), improved seasonal weather combined with strong spring execution drove better-than-expected results," he added.
Although the first-quarter comps were better than expected, the company faces tougher comps in the second quarter, and is unlikely to update guidance "until the spring selling season plays out," the analyst stated. He expects both gross margin and comps to be back-end weighted in 2024.
RBC Capital Markets On Lowe's Companies
Analyst Steven Shemesh reaffirmed a Sector Perform rating and price target of $246.
The 4% earnings beat in the first quarter was offset by the earnings guidance coming in around 4% below consensus, "leaving 2024 a back-half improvement story" and keeping full-year projections largely unchanged, Shemesh said.
"Mgmt shared that Pro comps were positive across all 3 geographic divisions," which compares to a negative Pro performance by Home Depot Inc
Morgan Stanley On Lowe's Companies
Analyst Simeon Gutman maintained an Overweight rating and price target of $250.
"We are raising our '24 EPS estimate by ~$0.05 to $12.20 and are maintaining our '25 EPS estimate of $13.65," Gutman said.
He added that the numbers reflect a comps decline of 2.3% in 2024 and positive comps of 3% for 2025.
Telsey Advisory Group On Lowe's Companies
Analyst Joseph Feldman reiterated a Market Perform rating and price target of $230.
Lowe's earnings beat was helped by a lower tax rate, Feldman said. The company's total sales contracted by 4.4% to $21.4 billion, with a 3.1% decline in traffic, he added.
Despite the beat, the company maintained its full-year guidance, which reflects "a challenging macro backdrop and ongoing weakness in DIY spending, particularly on big ticket discretionary categories," the analyst further wrote.
JPMorgan On Lowe's Companies
Analyst Christopher Horvers reaffirmed an Overweight rating on the stock.
Lowe's better-than-expected comps "appears to support our view that DIY could be forming a bottom first as larger projects lag with LOW also growing pro and online sales as it executes on sales productivity opportunities," Horvers said.
"While the gross margin miss merits understanding, the strong SG&A dollar control is supportive of our view that LOW as not over-earning and has opportunities to drive continues efficiencies," he added.
LOW Price Action: Shares of Lowe's Companies had declined by 0.68% to $223.32 at the time of publication on Wednesday.
