Lowe’s Surpasses 4Q Estimates; Plans $9B Share Buyback In 2021


Lowe’s Companies delivered a stronger-than-expected 4Q performance, driven by double-digit growth in comparable-store sales (comps). Shares of the home improvement retailer were up about 2.5% in Wednesday’s pre-market trading session.

Lowe’s (LOW) posted adjusted earnings of $1.33 per share, up 41.5% year-over-year, and exceeded analysts’ expectations of $1.21 per share.

Its revenue increased 26.7% year-over-year to hit $20.3 billion, topping analysts’ estimates of $19.4 billion. Its comps jumped 28.1% year-over-year, which was better than analysts’ growth forecast of 22%. Meanwhile, the company’s US home improvement business witnessed comps growth of 28.6% in 4Q.

The company’s CEO Marvin R. Ellison said, “Strong execution enabled us to meet broad-based demand driven by the continued consumer focus on the home, with growth over 16% in all merchandising departments, over 19% across all U.S. regions and 121% on Lowes.com.”

Ellison expects continued market share gains in 2021 and anticipates improved operating margins. Further, the company plans to repurchase $9 billion worth of shares in 2021. (See Lowe’s stock analysis on TipRanks)

Earlier on Feb. 18, Wells Fargo analyst Zachary Fadem raised the stock’s price target to $200 (16% upside potential) from $190 and maintained a Buy rating. Fadem sees upside potential in Lowe’s stock, thanks to the positive indicators in the housing space. Moreover, he finds Lowe’s stock attractively priced at the current levels.

Overall, consensus among analysts is a Strong Buy based on 11 Buys and 3 Holds. The average analyst price target of $195.42 implies upside potential of about 15.9% to current levels. Shares have gained about 36.8% in one year.

Furthermore, LOW scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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