Retail

What to Expect From Lowe's Earnings

Chris Lange

Published: May 17, 2016 12:05 pm

Last Updated: January 13, 2020 7:56 am

Lowe’s Companies Inc. (NYSE: LOW) is scheduled to report its fiscal second-quarter financial results before the markets open on Wednesday. The consensus estimates from Thomson Reuters call for $0.85 in earnings per share (EPS) on $14.87 billion in revenue. In the same period from last year, the specialty retailer posted EPS of $0.70 and $14.13 billion in revenue.

Lowe’s is one of numerous hardware stores, lumber yards and garden centers included in the building material and garden equipment subsector. The industry was worth an estimated $332.1 billion in 2015, up by 4.2% from the year before. Hardware-related sales at the home-improvement giant, however, are a small share of its total market and total sales. In addition to hardware, Lowe’s sells a broad array of home-related goods.

Home prices and demand for home improvement supplies can have a significant impact on Lowe’s business. With the ongoing economic recovery and housing market on the mend, Lowe’s posted sizable sales increases in recent years. The company reported revenues of $59.1 billion in fiscal 2015, up from $56.2 billion the previous fiscal year.

A few analysts weighed in on Lowe’s prior to the release of the earnings report:

• JPMorgan reiterated an Overweight rating.
• Oppenheimer reiterated an Outperform rating with an $85 price target.
• Jefferies has a Hold rating with an $81 price target.
• Deutsche Bank reiterated a Buy rating.
• Merrill Lynch reiterated a Buy rating with an $88 price target.

So far in 2016, Lowe’s has been relatively flat compared with the broad markets, with the stock is only up 2%. Over the past 52 weeks, the stock is up 7%.

Shares of Lowe’s were trading down 0.6% at $76.54 midday Tuesday, with a consensus analyst price target of $84.26 and a 52-week trading range of $62.62 to $78.13.