has seen big gains in 2020, but it has a high bar to cross when it reports second-quarter earnings on Wednesday.
Lowe’s shares (ticker: LOW) are up nearly 33% year to date, compared with 30.5% for
(HD), and less than 5% for the
Yet with those big gains come big expectations, especially after Home Depot reported a pretty robust quarter on Tuesday.
That isn’t to say that Lowe’s isn’t up to the task. The company has been one of the winners during the pandemic, as people spend more time at home and those that haven’t been financially hurt are redirecting their spending toward home improvement and furnishings. It has also been slowly working to close the operational gap with Home Depot, a trend some are hoping is getting a further boost from 2020 trends.
People are buying more houses and that flight to the suburbs has been good for both home-improvement retailers. The question is how long the good times will continue, given concerns that demand is just being pulled forward and could slacken later in the year—especially without further government stimulus or enhanced unemployment benefits. Bulls argue that the stores don’t need a pandemic to keep winning, but any commentary about sales and traffic strength could help the stock.
Analysts are looking for Lowe’s to earn $2.92 a share on revenue of $24.3 billion. That compares with EPS of $1.77 and revenue of $19.7 billion in the previous quarter. Lowe’s bottom-line results haven’t missed expectations since the spring of 2019.
Of the 30 analysts who cover Lowe’s, 80% rate it Buy or the equivalent, according to data from FactSet, 17% are on the sidelines and there is a single Sell call. The average analyst price target is $164.70.
The stock was down 0.3% to $157.94, in line with the 0.2% drop in the
Dow Jones Industrial Average.
Lowe’s scheduled a conference call for 9 a.m. Eastern time on Wednesday.
Write to Teresa Rivas at [email protected]