Lowe’s Companies, Inc. (LOW) released its second-quarter earnings results on Tuesday, surpassing expectations on the bottom line but falling short on revenue. The company reported adjusted earnings per share of $4.10, exceeding the analyst consensus of $3.99. However, quarterly revenues totaled $23.586 billion, missing the expected $24.013 billion.
Despite the revenue shortfall, analysts remain optimistic about Lowe’s performance. JP Morgan analyst Christopher Horvers reiterated an Overweight rating, highlighting the company’s strong gross margin of 33.5%, exceeding both analyst and Street expectations. The operating margin also surpassed estimates, reflecting ongoing productivity improvements and effective expense control. Horvers believes the margin upside supports a more positive outlook for Lowe’s.
Goldman Sachs analyst Kate McShane reiterated the Buy rating on Lowe’s, maintaining a price forecast of $268. While acknowledging the sales miss, McShane points out that it was somewhat expected following Home Depot’s (HD) earnings report last week. However, she also highlighted potential downside risks for the company, including prolonged pressure on comparable sales, potential price deterioration due to heightened competition, and execution challenges related to its turnaround efforts.
Lowe’s stock is currently trading lower by 1.53% to $239.48. The company’s strong margin performance and ongoing improvements are key factors contributing to analyst confidence, even amidst the revenue miss. The company’s outlook and future performance will continue to be closely watched by investors and analysts.
