Free Trial

Lowe’s Companies Tracking to New Highs in 2024

→ Exposed: 3 CENT Crypto to Explode June 24th? (From True Market Insiders) (Ad)
Lowes stock price forecast

Key Points

  • Lowe's had a decent quarter, outperforming expectations and reaffirming guidance. 
  • Cash flow remains solid and allows for repurchases and dividends while improving the balance sheet. 
  • Analysts are leading this market to a new high that may be reached before the end of the year. 
  • 5 stocks we like better than Lowe's Companies

Shares of Lowe’s Companies NYSE: LOW corrected to critical support levels ahead of the Q1 release, setting up a buying opportunity confirmed in its aftermath. The results are not strong but highlight the differentiation between the company and its largest competitor, The Home Depot NYSE: HD, which trails in key spring segments. 

Where Home Depot is favored by professional accounts, offering a slimmer selection in a more compact format, Lowe’s excels with choice across critical spring verticals like lawn and garden, outdoor entertaining, and DIY projects. That, along with its leaning into professional services, helped to sustain operations, provide better-than-expected results, and lead management to reaffirm guidance. 

"This quarter, we rolled out our new DIY loyalty program nationally, expanded same-day delivery options and took market share in key categories. We continue to gain momentum with our Total Home strategy, reflected in our growth in Pro and online,” said Marvin R. Ellison, Lowe's chairman, president and CEO.

Lowe’s Advances On Results and Guidance 

Lowe's Companies Today

Lowe's Companies, Inc. stock logo
LOWLOW 90-day performance
Lowe's Companies
$223.35
-3.51 (-1.55%)
(As of 06/14/2024 ET)
52-Week Range
$181.85
$262.49
Dividend Yield
2.06%
P/E Ratio
17.94
Price Target
$251.33

Lowe’s results aren’t fantastic but are much better than feared. The company produced $21.4 billion in revenue for a decline of 4.3% that outperformed the consensus by 150 basis points. The outperformance is good but offset by the fact most analysts lowered their targets within the last 30 days; the bar was set low. The decline is driven by a 4.1% decline in comp sales compounded by lower realized prices in commoditized verticals. Big-ticket DIY items were the primary weakness, offset by professional and online shopping growth. 

Margin is also better than feared. The company’s gross and operating margin contracted compared to last year but less than expected. The GAAP $3.06 in diluted earnings is down YOY but a dime better than the consensus reported by Marketbeat.com, suggesting the guidance may be cautious. 

The company reiterated its full-year guidance despite the Q1 strength. This means guidance is cautious, or the back half will be softer than expected. However, full-year revenue and earnings guidance align with the consensus estimates and leave room for outperformance. In the long term, the company will likely return to growth by the year's end and accelerate in 2025 as lower interest rates fuel economic activity and housing markets. 


Lowe’s Capital Returns Are Safe and Reliable

Lowe's Companies Dividend Payments

Dividend Yield
2.06%
Annual Dividend
$4.60
Dividend Increase Track Record
53 Years
Annualized 3-Year Dividend Growth
24.10%
Dividend Payout Ratio
36.95%
Next Dividend Payment
Aug. 7
See Full Details

The only negative aspect of Lowe’s report is the negative shareholder equity, which is not a problem for investors. That situation will be corrected in time because it is a function of share repurchases that significantly reduce the count. The average diluted count is down 2.5% in FQ1 after falling nearly 10% in the prior year’s Q1, and repurchases are likely to continue at a robust pace this year. The company’s business is cash flow positive and allows for repurchases, dividends, reinvestment, and balance sheet improvements. The company uses debt to finance operations but reduces the load over time.

The dividend is worth about 1.9%, with shares near $235, outpacing the S&P 500 average by roughly 50 basis points. The payout is a safe 33% of the earnings and growing. The company is a Dividend King with 60 years of increases to its credit. Future increases may be small but should continue annually for the foreseeable future, aided by share repurchases. Each year, the share count is reduced, freeing up cash flow to increase the dividends for the shares still floated on the market. 

Lowe’s Analysts Indicate New Highs Are Possible 

Lowe’s analysts’ have the stock pegged at Hold, verging on Moderate Buy with a rising price target. The consensus is 10% above the prerelease price point and up compared to last quarter and year. The Q1 results are not robust but suggest the sentiment will hold firm if the trend in price targets doesn’t continue. Until then, the trend suggests this stock will trade in the upper end of its target range between the consensus $252 and the high target of $289, well above the current all-time high. 

The price action is favorable following the release. The market shows support at the critical level and may continue to rebound. The risk is resistance near $240. The market also shows some resistance at this level and may have difficulty moving higher. If the market cannot continue higher soon, it risks moving sideways or falling within the established range until later in the year. 

Lowes stock chart

Should you invest $1,000 in Lowe's Companies right now?

Before you consider Lowe's Companies, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Lowe's Companies wasn't on the list.

While Lowe's Companies currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Ten Starter Stocks For Beginners to Buy Now Cover

Just getting into the stock market? These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies.

Get This Free Report
Thomas Hughes
About The Author

Thomas Hughes

Contributing Author

Technical and Fundamental Analysis

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Home Depot (HD)
4.1184 of 5 stars
$346.84-0.3%2.59%23.26Moderate Buy$377.46
Lowe's Companies (LOW)
4.6908 of 5 stars
$223.35-1.5%2.06%17.94Hold$251.33
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Recent Videos

Will FOMC Push Stocks Higher? Here’s What to Expect
Unlock Growth: Understanding Dividend Yield
Palantir Stock Excluded from S&P 500: Still a Buy?

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines