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On Thursday, KeyBanc Capital Markets reaffirmed its positive stance on Lowe’s Companies Inc. (NYSE: NYSE:LOW), maintaining an Overweight rating and a $266.00 price target. The home improvement retailer’s first-quarter performance was highlighted as surpassing expectations, with particular strength observed in the professional contractor segment and price increases aiding results. According to InvestingPro data, Lowe’s maintains a "GOOD" overall Financial Health score, with particularly strong marks in profitability metrics and cash flow management.
Lowe’s recent quarterly report showed a 1.7% decline in comparable sales, influenced by less favorable weather and a dip in do-it-yourself (DIY) customer activity, which fell by 4%. However, this was partly balanced by robust growth from professional customers, increased online sales, and a slight benefit from hurricane-related purchases. The company witnessed an uptick in April, with trends showing the strongest improvement, especially when accounting for the timing of Easter. With annual revenue of $83.67 billion and a solid gross profit margin of 33.32%, Lowe’s remains a prominent player in the Specialty Retail industry. InvestingPro subscribers can access 7 additional key insights about Lowe’s financial performance and market position.
The company’s management team has confirmed its financial outlook for 2025, which has accounted for the effects of tariffs but not the anticipated acquisition of Maintenance Supply Headquarters (ADG). KeyBanc’s analyst views Lowe’s as having considerable potential for share price appreciation over the longer term, especially with a prospective housing market rebound on the horizon.
Although a recovery is not expected within the next six months, the analyst anticipates that growing optimism for a housing market rebound could potentially lead to a 25% or greater increase in Lowe’s stock value. This optimism is based on the stock’s earnings multiple returning to the higher levels seen in the previous year. KeyBanc’s reiterated price target reflects this confidence in Lowe’s prospects for growth and recovery.
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, surpassing the forecast of $2.88. However, the company’s revenue came in at $20.93 billion, slightly missing the expected $20.97 billion. Despite the revenue miss, Lowe’s confirmed its fiscal year 2025 guidance, projecting total sales between $83.5 billion and $84.5 billion. The company’s gross margin improved slightly, while the operating margin saw a decline.
In a strategic move, Lowe’s announced a partnership with Mirakl to expand its online marketplace, aiming to enhance product offerings for both DIY enthusiasts and professional contractors. Analyst firms have recently adjusted their price targets for Lowe’s stock: Bernstein raised its target to $266, maintaining an Outperform rating, while DA Davidson and Goldman Sachs lowered their targets to $240 and $258, respectively. DA Davidson maintained a Neutral rating, and Goldman Sachs reiterated a Buy rating, reflecting confidence in Lowe’s potential for future growth.
Lowe’s also reiterated its commitment to its Total (EPA:TTEF) Home Strategy, focusing on expanding its Pro business segment and online growth. The company highlighted its ongoing efforts to diversify global sourcing and mitigate risks associated with tariffs. These developments come amid a challenging retail environment influenced by high mortgage rates and mixed macroeconomic factors.
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