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On Thursday, Goldman Sachs analyst Kate McShane revised the price target on Lowe’s Companies Inc. (NYSE: NYSE:LOW) to $258.00, a slight decrease from the previous $260.00, while reiterating a Buy rating on the stock. According to InvestingPro data, analyst targets for Lowe’s range from $207 to $305, with the company currently trading at $227.37. The adjustment followed Lowe’s shares trading down by 1.7%, a slight underperformance compared to the 1.6% decline in the S&P 500 index, after the company reported earnings per share that surpassed expectations and confirmed its financial outlook for fiscal year 2025.
McShane noted several key points from Lowe’s quarterly results. The company’s same-store sales (SSS) were negatively influenced by unfavorable weather conditions and the timing of Easter, which led to transaction trends that were weaker than in the previous quarter and a slowdown in the growth of sales to professional customers. Despite these challenges, InvestingPro data shows Lowe’s maintains strong fundamentals with a 33.3% gross profit margin and has consistently raised its dividend for 41 consecutive years. Additionally, Lowe’s management indicated that they do not anticipate a broad increase in prices due to tariffs.
The report also included Lowe’s updated insights on the current state of the home improvement sector. Despite the ongoing challenges presented by the housing market, McShane believes that Lowe’s is well-positioned to accelerate its growth once the macroeconomic environment improves, particularly through its continued investment in the Pro business segment.
The new price target of $258 reflects a modest revision, which takes into account the current market conditions while maintaining confidence in Lowe’s potential for future growth. Goldman Sachs’ stance remains positive on Lowe’s prospects as the company navigates through a complex housing market landscape. InvestingPro analysis indicates the company’s overall financial health score is "GOOD," with particularly strong profitability metrics. For deeper insights into Lowe’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Lowe’s Companies Inc. reported its earnings for the first quarter of 2025, revealing an earnings per share (EPS) of $2.92, which surpassed the forecast of $2.88. However, the company’s revenue fell short of expectations, coming in at $20.93 billion against the anticipated $20.97 billion. This mixed financial picture reflects challenges in sales growth, as comparable sales declined by 1.7%. Despite these challenges, Lowe’s introduced new AI-powered products and expanded market strategies to enhance its offerings. Additionally, Lowe’s announced a strategic partnership with Mirakl to expand its online marketplace, aiming to offer a broader range of products. The collaboration is part of Lowe’s Total (EPA:TTEF) Home Strategy and integrates with the MyLowe’s Rewards loyalty program. Meanwhile, the company is set to acquire Artisan Design Group for $1.325 billion, a move expected to boost its presence in the design, distribution, and installation services market. The acquisition is anticipated to close in the second quarter and is expected to be accretive to earnings per share in the following fiscal year.
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