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On Thursday, Truist Securities adjusted its outlook for Lowe’s Companies Inc. (NYSE:LOW), increasing the price target from $258.00 to $264.00, while maintaining a Buy rating on the stock. With a market capitalization of $127 billion and a P/E ratio of 19.1, InvestingPro analysis suggests the stock is currently trading near its Fair Value. The decision comes after Lowe’s reported first-quarter results that were consistent with expectations, despite a slow start to the quarter due to unfavorable weather conditions.
The home improvement retailer experienced a 1.7% decline in comparable store sales, attributed to the early quarter weather impact. However, as conditions improved, particularly around an adjusted Easter period, sales picked up pace. Truist Securities noted this acceleration in their analysis. As a prominent player in the Specialty Retail industry, Lowe’s maintains strong financial health with an overall "GOOD" rating from InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ top US stocks.
In their commentary, Truist Securities highlighted that Lowe’s has reaffirmed its guidance for the full year. Management at Lowe’s expressed confidence in their ability to navigate the current tariff environment, without foreseeing a need for widespread price increases. This outlook mirrors sentiment regarding Home Depot (NYSE:HD), with both companies not expected to implement significant price adjustments. Notably, Lowe’s has maintained dividend payments for 55 consecutive years and raised them for 41 straight years, demonstrating remarkable financial stability.
The analyst underscored the strength in consumer engagement and the momentum within the professional customer segment as key drivers for Lowe’s. The firm believes that the question is not if, but when, Lowe’s will see a material acceleration in sales growth, supporting their continued recommendation for investors to buy shares.
The positive outlook for Lowe’s is based on what Truist Securities refers to as the "Golden Handcuff thesis," suggesting that the combination of an active consumer base and growth in the professional sector will inevitably lead to significant sales increases for the company. The revised price target reflects this confidence in Lowe’s potential for growth.
In other recent news, Lowe’s Companies Inc. reported a 1.7% decline in comparable sales for the first quarter, which was better than analysts’ expectations of a 2% drop. The company’s gross margin and adjusted earnings before interest and taxes exceeded forecasts, with earnings per share surpassing estimates by 4 cents. Despite challenges like unfavorable weather, Lowe’s saw strong performance in its professional contractor segment and increased online sales. The company confirmed its financial outlook for 2025, projecting total sales between $83.5 billion and $84.5 billion, with a comparable sales growth of 0-1%.
Analysts have mixed views on Lowe’s stock, with KeyBanc maintaining an Overweight rating and a $266 price target, while Bernstein also raised its target to $266, citing the company’s strong quarterly performance. Conversely, DA Davidson cut its target to $240, maintaining a Neutral rating, but acknowledged Lowe’s potential to handle current tariff environments. Goldman Sachs slightly lowered its price target to $258 but reiterated a Buy rating, confident in Lowe’s growth potential once macroeconomic conditions improve.
Additionally, Lowe’s announced a strategic partnership with Mirakl to expand its online marketplace, offering a broader range of products to customers. This collaboration aims to enhance Lowe’s Total (EPA:TTEF) Home Strategy by providing a comprehensive selection of home improvement products. The expanded marketplace integrates with the MyLowe’s Rewards loyalty program, allowing members to earn points on purchases and offering home delivery for all items.
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