Lowe’s stock holds as Cowen maintains $270 price target

On Thursday, Cowen analysts maintained a Hold rating for Lowe’s (NYSE: LOW) shares, with a steady price target of $270.00. According to InvestingPro data, analyst targets currently range from $217 to $309, with the stock trading at $245.36. The company’s Financial Health Score stands at "FAIR," with particularly strong marks in profitability metrics. The home improvement retailer recently reported a robust fourth-quarter performance, surpassing expectations, and provided a solid forecast for fiscal year 2025. Despite a sluggish beginning in the first quarter, analysts see potential for growth, particularly through the company’s momentum in the professional contractor segment. With a market capitalization of $139 billion and a solid gross profit margin of 33.3%, Lowe’s maintains its position as a prominent player in the Specialty Retail industry. For deeper insights into Lowe’s financial health and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro.

Lowe’s has continued to experience growth in the professional (Pro) sector, with high single-digit increases, which is expected to carry on into FY25. This contrasts with the do-it-yourself (DIY) segment, particularly in big-ticket discretionary categories, which remains weak. Nonetheless, Lowe’s is strategically positioning itself to capture a larger market share when these categories rebound. The company’s strong financial foundation is evident in its impressive dividend history, having raised dividends for 41 consecutive years and maintained payments for 55 years straight.

The company’s comparable store sales turned positive for the first time since the third quarter of 2022, with a modest increase of 0.2%. This improvement was driven by strong performance in the professional segment, while the DIY segment still faces challenges.

Looking ahead, Lowe’s forecasts a flat to 1% increase in comparable store sales, which analysts believe is an attainable target that could potentially surpass expectations. This optimism is tempered by the need to closely monitor factors such as consumer confidence and housing market indicators. The company’s guidance also includes an anticipated 100 basis point increase in market share, contrasting with a flat industry projection.

Cowen’s analysis suggests that while the near-term outlook for Lowe’s may be mixed due to various market influences, the company’s strategic initiatives and market positioning could result in a favorable performance in the longer term.

In other recent news, Lowe’s Companies Inc (NYSE:LOW). reported a strong fourth-quarter performance, with comparable store sales increasing slightly by 0.2%, driven by professional customer growth and online sales. Despite these positive results, the company’s guidance for fiscal year 2025 fell below market expectations, with a more cautious outlook due to anticipated weather impacts and a flat industry performance. Piper Sandler, Loop Capital, Mizuho (NYSE:MFG), and Truist Securities all adjusted their price targets for Lowe’s, citing varying reasons such as weather conditions, interest rates, and market dynamics, while maintaining favorable ratings like Overweight and Buy.

Piper Sandler lowered its price target to $296, noting Lowe’s solid growth trajectory and potential gains from productivity initiatives. Loop Capital reduced its target to $295, highlighting the impact of interest rates and a slight decrease in gross margin expectations. Mizuho adjusted its target to $300, anticipating a rebound in the second quarter despite a challenging first quarter due to weather. Truist Securities also set its target at $295, emphasizing strong professional segment performance and future growth potential as consumer confidence improves.

KeyBanc maintained a Sector Weight rating, acknowledging the impressive fourth-quarter results but noting challenges in the DIY segment. Analyst feedback suggests that Lowe’s is well-positioned for long-term growth, with investments in professional customers and online sales expected to drive future performance. These recent developments indicate that Lowe’s is navigating current economic conditions while setting the stage for potential recovery in the home improvement sector.

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