Stock Update (NYSE:LOW): Lowe’s Companies, Inc.’s Outlines Strategic Priorities and Long-Term Financial Targets at 2016 Analyst and Investor Conference


Lowe’s Companies, Inc. (NYSE:LOW) meets today with analysts and investors in Mooresville, North Carolina to discuss its strategic priorities and long-term financial targets.

“We’re focused on evolving our business to further drive trust and loyalty by empowering customers throughout their project journey.  Our customers take great pride in their homes and we are equally proud to be the first stop for their home improvement projects,” commented Robert A. Niblock, Lowe’s chairman, president and CEO.  “We’re building on our past success and adapting to meet the needs of a changing customer.”

Today’s presentations will include the company’s plans to:

  • Expand home improvement reach to drive profitable share gains
  • Further adapt to the customer, developing capabilities to anticipate and support their needs
  • Generate long-term profitable growth and substantial returns for shareholders

“We continue to generate solid cash flow and deliver substantial returns for our shareholders,” commented Robert F. Hull, Jr., Lowe’s CFO.  “Return on Invested Capital is expected to exceed 22 percent by 2019, an increase of more than 500 basis points over the next three years.”

Today, Lowe’s also reiterates its prior sales and earnings guidance for the 2016 fiscal year, which was provided in its Nov. 16, 2016 earnings release.

“We are pleased with our performance quarter-to-date, including the holiday season, and remain confident in our Business Outlook,” Hull added.

Lowe’s Business Outlook

Fiscal Year 2016 — a 53-week Year (comparisons to fiscal year 2015 — a 52-week year; based on U.S. GAAP)

  • Total sales are expected to increase 9 to 10 percent, including the 53rd week
  • The 53rd week is expected to increase total sales by approximately 1.5 percent
  • Comparable sales are expected to increase 3 to 4 percent
  • The company expects to add approximately 40 home improvement and hardware stores.
  • Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase approximately 65 basis points.1
  • The effective income tax rate is expected to be approximately 40.1%.
  • Diluted earnings per share of approximately $3.52 are expected for the fiscal year ending February 3, 2017.(Original Source)

Shares of Lowe’s Companies closed yesterday at $72.46, down $0.20 or -0.28%. LOW has a 1-year high of $83.65 and a 1-year low of $62.62. The stock’s 50-day moving average is $69.92 and its 200-day moving average is $76.71.

On the ratings front, LOW stock has been the subject of a number of recent research reports. In a report issued on December 1, Credit Suisse analyst Seth Sigman reiterated a Buy rating on LOW, with a price target of $72, which represents a slight downside potential from current levels. Separately, on November 30, UBS’s Michael Lasser reiterated a Buy rating on the stock and has a price target of $80.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Seth Sigman and Michael Lasser have a yearly average return of 1.9% and 6.5% respectively. Sigman has a success rate of 59% and is ranked #1558 out of 4262 analysts, while Lasser has a success rate of 61% and is ranked #380.

Overall, 4 research analysts have assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $76.63 which is 5.8% above where the stock closed yesterday.

Lowe’s Cos., Inc. is engaged in the retail sale of home improvement products. It offers products for maintenance, repair, remodeling, home decorating and property maintenance. The company also offers home improvement products in the following categories: appliances, bathroom, building supply, electrical, flooring, hardware, paint, kitchen, plumbing, lighting & fans, outdoor living, windows and doors.