A Strong Quarter a Good Sign for Low Stock
Lowe’s Companies, Inc. (LOW) reported first quarter non-GAAP EPS of $0.87 before the opening bell Wednesday, compared to the consensus estimate of $0.85. Revenues increased 7.8% from last year to $15.23 billion. Analysts expected revenues of $14.88 billion. Net income came in at $884 million, or $0.98 per share, from $673 million, or $0.70 per share, a year earlier. The home improvement retailer saw comparable sales for the quarter ended April 29, 2016 jump 7.5 percent.
“We executed well in the quarter, growing both transaction and average ticket to achieve comparable sales growth that exceeded our expectations,” commented Robert A. Niblock, Lowe’s chairman, president and CEO.
Lowe’s said it expects full-year diluted earnings to be $4.11 per share. It also noted it repurchased $1.2 billion of stock under its share repurchase program and paid $255 million in dividends in the first quarter.
On valuation measures, Lowe’s Cos. shares, which currently have an average 3-month trading daily volume of 4.10 million shares, trade at a trailing-12 P/E of 27.86, a forward P/E of 16.29 and a P/E to growth ratio of 1.16. The median analyst price target on the name is $84.00 with a high target of $94.00. On Monday, Oppenheimer upped its price target on Lowe’s stock to $85 from $77, noting the home improvement sector remains a “bright spot” in the retail industry. Currently ticker boasts 17 ‘Buy’ endorsements, compared to 8 ‘Holds’ and no ‘Sell’.
Lowe’s shares have climbed less than 1 percent since the beginning of the year, while the S&P’s 500 index has stayed nearly flat. The stock has gained nearly 6 percent on a year-over-year basis. LOW last traded at $76.07/share.