Lowe’s Gains on Strong Q3 Results


Shares of North Carolina-based retail firm Lowe’s Companies (LOW) were trading up in the early trading hours on Wednesday after the company announced strong financial results for the third quarter of 2021.

Lowe’s offers home improvement products like appliances, bathroom fittings, building supply, electrical, flooring, hardware, paint, plumbing, lighting & fans, outdoor living products, windows and doors, among others.

Q3 Results

Adjusted earnings per share (EPS) increased 38% year-over-year to $2.73, beating the Street’s estimate of $2.31.

Total sales grew 2.2% to $22.9 billion, surpassing analysts’ expectations of $21.72 billion. U.S. comparable sales rose 2.6% during the quarter.

Other Highlights

Lowe’s repurchased 13.7 million shares for $2.9 billion during the third quarter. It also paid dividends of $563 million. (See Insiders’ Hot Stocks on TipRanks)

As of October 29, 2021, the company had 1,973 home improvement and hardware stores in operation in the U.S. and Canada.

CEO Comments

Chairman, President, and CEO of Lowe’s, Marvin R. Ellison, said, “Our momentum continued this quarter, with U.S. sales comps up nearly 34% on a two-year basis, as our Total Home strategy is resonating with the Pro and DIY customer alike. In the quarter, we drove over 16% growth in Pro and 25% on Lowes.com.

“We also delivered operating margin expansion by driving productivity through disciplined operational execution and cost management.”

Outlook

The company has raised the outlook for 2021 following strong financial results for the first nine months of 2021. It now expects revenue to total around $95 billion, and capital expenditures of up to $2 billion.

Furthermore, it expects to buy back shares worth nearly $3 billion in the fourth quarter, taking the total share repurchases for 2021 to an estimated $12 billion.

Wall Street’s Take

After the release of third-quarter results, Wells Fargo (WFC) analyst Zachary Fadem maintained a Buy rating on the stock with a price target of $260 (3.9% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 11 Buys and three Holds. The average Lowe’s Companies price target of $241.82 implies a 3.3% downside potential.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Lowe’s performance.

According to the tool, the company’s website traffic registered a 5.2% decrease in global visits in October. However, website traffic has increased approximately 17% year-to-date.

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