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On Thursday, DA Davidson adjusted its price target for Lowe’s (NYSE:LOW) shares, reducing it to $240 from the previous target of $270, while maintaining a Neutral rating on the company. According to InvestingPro data, Lowe’s, with its substantial market capitalization of $127 billion, currently trades at a P/E ratio of 19.1x. The company’s stock price sits between its 52-week range of $206.38 to $287.01. The firm’s analysts pointed to several positive aspects from Lowe’s recent earnings call and subsequent discussions, including the company’s return to positive comparable store sales (comps) later in the quarter and into the early second quarter. This trend was noted as being in line with Home Depot (NYSE:HD)’s performance, suggesting a slight improvement in industry conditions despite mixed macroeconomic factors.
The analysts observed that Lowe’s appears to be well-positioned to handle the current tariff environment, which should help the company to stay competitive in pricing. They highlighted Lowe’s use of a similar portfolio strategy as its main competitor, which is expected to contribute to the company’s ability to navigate these challenges effectively. With annual revenue of $83.7 billion and a healthy gross profit margin of 33.3%, InvestingPro analysis indicates the company maintains a strong financial position, earning a "GOOD" overall health score.
Furthermore, the guidance provided by Lowe’s indicates an anticipation of better comparable sales and operating margin trends as the year advances. DA Davidson’s analysts believe that these positive factors balance out the negative pressure from persistent mortgage rates, leading to their decision to maintain a Neutral stance on the stock. InvestingPro subscribers can access additional insights, including the fact that Lowe’s has maintained dividend payments for 55 consecutive years and raised them for 41 straight years, demonstrating remarkable financial stability. Analyst targets for the stock range from $207 to $305, reflecting diverse market opinions about its growth potential.
The new price target of $240 is based on an 18x multiple of DA Davidson’s 2026 earnings estimate for Lowe’s. The firm’s analysis, titled "Baker’s Takes," includes insights from the earnings call and additional discussions, offering a detailed perspective on Lowe’s quarterly results and future expectations.
In other recent news, Lowe’s Companies Inc. reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $2.92, slightly exceeding the forecast of $2.88. However, the company’s revenue fell short of expectations, coming in at $20.93 billion compared to the anticipated $20.97 billion. Despite the revenue miss, Lowe’s maintained its full-year sales outlook, projecting between $83.5 billion and $84.5 billion, with EPS expected to range from $12.15 to $12.40. In a strategic move to bolster its online presence, Lowe’s announced a partnership with Mirakl to expand its online marketplace, aiming to offer a wider range of products and enhance the shopping experience for customers. This partnership supports Lowe’s Total (EPA:TTEF) Home Strategy by integrating with the MyLowe’s Rewards loyalty program, allowing customers to earn points on marketplace purchases. Additionally, Lowe’s announced its acquisition of Artisan Design Group for $1.325 billion, expected to close in the second quarter. This acquisition is anticipated to be accretive to Lowe’s earnings per share in the first full fiscal year following the transaction. Lastly, Goldman Sachs made a slight adjustment to Lowe’s stock price target, reducing it from $260 to $258, while maintaining a Buy rating, reflecting confidence in Lowe’s potential for growth despite current market challenges.
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