S&P 500 eases slightly from fresh record high after stronger economic growth
On Wednesday, Citi analyst Steven Zaccone adjusted the price target for Lowe’s Companies Inc. (NYSE: NYSE:LOW) shares, bringing it down to $253.00 from the previously set $269.00, while maintaining a Neutral rating on the stock. The revision comes ahead of the home improvement retailer’s first-quarter earnings report for 2025, which is scheduled to be released on May 21 before the market opens. According to InvestingPro data, Lowe’s maintains a GOOD financial health rating and has demonstrated remarkable dividend consistency, having raised its dividend for 41 consecutive years.
Zaccone predicts a slight shortfall in Lowe’s first-quarter earnings per share (EPS), attributing the expected underperformance to a combination of unfavorable weather patterns, particularly in the southern United States, and a decline in demand for do-it-yourself (DIY) products. Citi’s projection for same-store sales (SSS) stands at a 3.0% decrease, which is more pessimistic than the Street’s consensus of a 1.9% drop and aligns with the -3% market expectations Zaccone gathered from discussions with investors. The company’s current performance metrics from InvestingPro show trailing twelve-month revenue of $83.67 billion and a healthy gross profit margin of 33.32%.
The analyst anticipates that, given the sluggish start to the year, Lowe’s management will likely set the tone for the remainder of the year at the lower end of the company’s previously issued guidance for 2025. This conservative stance reflects the challenges faced in the first quarter, which could impact the company’s performance outlook.
Investors and market watchers are now looking toward the upcoming earnings report to see how Lowe’s has navigated the early part of the year and to gauge the company’s prospects for the rest of 2025. The updated price target from Citi provides a new benchmark against which Lowe’s financial results and market performance will be measured.
In other recent news, Lowe’s Companies Inc. has made significant strides with its acquisition of Artisan Design Group (ADG) for $1.325 billion. This move is strategically aimed at enhancing Lowe’s offerings to professional customers, potentially expanding its total addressable market by approximately $50 billion. Analysts from UBS have maintained a Buy rating on Lowe’s, setting a price target of $300, indicating confidence in the company’s growth potential through this acquisition. Meanwhile, KeyBanc Capital Markets upgraded Lowe’s stock rating to Overweight with a $266 price target, citing the acquisition as a key factor in their optimistic outlook.
DA Davidson, however, has maintained a Neutral rating with a $270 price target, acknowledging the acquisition’s strategic interest but considering its impact relatively minor in scale. The acquisition aligns with Lowe’s ongoing strategy to penetrate the professional segment of the home improvement market, which is expected to offer significant growth opportunities. The company’s efforts to integrate ADG’s services are viewed as a positive step toward differentiating itself from competitors in the industry. These developments come amid a broader context of economic challenges, including tariff discussions involving major retailers like Lowe’s, as President Trump engages with these companies on the impact of tariffs.
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