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Earnings Previews: Lowe's, StoneCo, Target, TJX

This week’s earnings will be focused on retailers. Beginning Tuesday morning, with Dow Jones industrial average components Home Depot and Walmart take center stage, but reports are also due from another Dow stock, a chipmaking giant, and China’s largest e-commerce company.

Though not in the same market-cap league as those stocks, three companies reporting results after markets close Monday will garner some attention: Bitfarms, IonQ and Lucid. One is a bitcoin miner, one is a quantum computer maker and the other is a hot electric vehicle maker.

Here’s a look at four companies set to report results either after markets close on Tuesday or before they open on Wednesday.

Lowe’s

First thing Wednesday, Home Depot rival Lowe’s Companies Inc. (NYSE: LOW) will report third-quarter fiscal 2022 results. Over the past 12 months, the share price has risen by just over 50%, with half that gain coming in the October quarter. Over the same 12-month period, Home Depot shares are up about 38%.

What analysts are likely to be paying closest attention to is how much of Lowe’s business is not coming from professional contractors, electricians and plumbers. The company claimed that 25% of second-quarter revenue came from professionals. Any increase or decrease will weigh heavily on how investors react to earnings.

Of 32 analysts covering the company, 25 rate the shares as a Buy or Strong Buy. Another seven give the stock a Hold rating. At a recent price of around $235.10, Lowe’s stock trades essentially at the median price target of $235. At the high price target of $281, the upside potential is 19.5%.

Third-quarter revenue is forecast at $21.99 billion, which would be down 20% sequentially and 5.9% lower year over year. Adjusted earnings per share (EPS) are expected to come in at $3.25, down 45% sequentially but up 18% year over year. (The July quarter is historically the best for both home improvement giants.) For the full year, analysts expect EPS of $11.44, up 29%, on sales of $93.66 billion, up 4.5%.

Lowe’s share price to earnings multiple for the 2022 fiscal year is 20.6. For the 2023 fiscal year, the multiple to an estimated $12.22 EPS is 19.3, and for 2024, it is 17.2 times estimated EPS of $13.67. The stock’s 52-week range is $146.72 to $239.27. Lowe’s pays an annual dividend of $3.20 (yield of 1.35%).

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