On Wednesday, RBC Capital Markets slightly increased its price target for Lowe's Companies Inc. (NYSE: NYSE:LOW), setting the new target at $291.00, up from the previous $290.00, while keeping a Sector Perform rating on the stock.
The analyst from RBC Capital noted that although there are various factors influencing the current quarter, the overall perspective on Lowe's remains steady for the time being. The lack of clarity on the improvement within the product category means that the forthcoming investor day, scheduled for December 11, is the next event that could potentially influence the company's stock.
During this event, expectations are set for Lowe's to present further insights into the growth strategies for their professional customer segment and the margin management tools available to the company if sales continue to be muted through 2025.
Adjustments have been made to the fourth-quarter comparable sales estimates, now anticipating a 2% decline, which is an improvement from the previously expected 3% decrease. Additionally, the adjusted earnings per share (EPS) estimate for the same quarter has been revised to $1.82, up from the former $1.80 estimate.
Looking forward to the years 2025 and 2026, RBC Capital projects comparable sales to be approximately flat and then to increase by 4.5%, respectively, which aligns with their previous predictions. The adjusted EPS forecast for these years has been modified, with the 2025 estimate now at $12.43, up from $12.58, and the 2026 estimate at $13.84, up from $13.79.
The updated price target of $291 is based on roughly 21 times the revised 2026 adjusted EPS estimate of $13.84. This slight upward adjustment reflects the minor changes in the near-term and longer-term financial estimates for Lowe's.
In other recent news, Lowe's Companies Inc. has reported notable developments. The home improvement retailer exceeded both Goldman Sachs (NYSE:GS) and consensus estimates with an adjusted earnings per share (EPS) of $2.89. The company also updated its 2024 EPS guidance to a range of $11.80 to $11.90, aligning with current street estimates.
Analysts from various firms have adjusted their price targets for Lowe's. Wolfe Research raised its price target to $308.00 based on a forward-looking valuation, whereas DA Davidson trimmed the price target to $270.
UBS maintained its Buy rating, increasing the stock's price target from $290.00 to $300.00. Baird also reaffirmed its Outperform rating with a $295.00 price target, suggesting that Lowe's stock is currently undervalued. Jefferies raised the price target for Lowe's to $301, maintaining a Buy rating. These are the recent developments for Lowe's.
InvestingPro Insights
Lowe's Companies Inc. (NYSE: LOW) continues to demonstrate its strength in the Specialty Retail industry, as highlighted by recent InvestingPro data and tips. The company's market capitalization stands at a robust $147.08 billion, underlining its significant market presence.
InvestingPro Tips reveal that Lowe's has maintained dividend payments for an impressive 54 consecutive years, with a current dividend yield of 1.77%. This consistent dividend track record, coupled with a 4.55% dividend growth in the last twelve months, showcases the company's commitment to shareholder returns. This aligns well with the article's focus on Lowe's financial performance and future outlook.
The company's P/E ratio of 22.69 and adjusted P/E ratio of 21.52 for the last twelve months suggest a reasonable valuation, especially considering the company's strong market position. Additionally, Lowe's has demonstrated a solid 29.23% price total return over the past year, indicating positive investor sentiment.
These insights complement the article's discussion on RBC Capital's price target adjustment and the upcoming investor day. They provide additional context to Lowe's financial health and market performance, which could be crucial factors in the company's strategies for professional customer growth and margin management.
For investors seeking a deeper analysis, InvestingPro offers 7 additional tips that could provide further insights into Lowe's market position and financial outlook.
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