From Nasdaq: 2024-11-21 07:45:00

Lowe’s Companies (NYSE: LOW) offers a second-chance opportunity for investors with a price pullback from its October peak. Despite tepid results, the pullback is unlikely to deepen due to the company’s operational quality and positive outlook for next year. Consumer spending on smaller items remains strong, supported by digital commerce channels.

Lowe’s revenue is contracting in 2024 but less than expected, with growth expected to resume in 2025. Earnings growth in 2025 is crucial for the capital return outlook, and the company is well-positioned to benefit from lower interest rates and favorable policies. Lowe’s trimmed share repurchases in 2024 to align with cash flow.

Despite outperforming expectations and raising guidance, Lowe’s shares fell due to a price pullback. Positive comps in the Pro and digital segments, along with strong consumer demand for smaller ticket projects, drove net revenue of $20.17 billion, outpacing consensus by 130 basis points. Margin contraction was less than expected, with adjusted EPS at $2.89.

Lowe’s guidance aligns with analysts’ trends, with full-year targets exceeding consensus figures. Sentiment is firming to Moderate Buy, with a consensus price target near $275, signaling potential undervaluation. Despite falling after the release, Lowe’s stock shows favorable price action at critical support levels, likely to consolidate before reaching new highs in 2025.



Read more at Nasdaq:: Lowe’s Stock Dip: Don’t Miss This Second-Chance Entry Point