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Lowe’s Experiences Softness in Bigger Ticket Discretionary Demand

publication date: Jan 8, 2025
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Image: Lowe’s shares have rallied nicely since the beginning of 2023. 

Buoyed in part by anticipated modest storm-related demand in the fourth quarter, management expects total sales for the full year 2024 of $83.0-$83.5 billion (was $82.7-$83.2 billion)—consensus was $82.99 billion--and comparable sales to be between -3.0% to -3.5% (was -3.5% to -4.0%). Its adjusted operating margin for the year is now targeted in the range of 12.3%-12.4% (was 12.4%-12.5%), while adjusted diluted earnings per share is expected in the range of $11.80-$11.90 (was $11.70-$11.90), the midpoint above consensus of $11.81. Our fair value estimate of $242 for Lowe’s shares is roughly in-line with where the firm’s equity is trading, and while its recently raised guidance was well-received, we remain on the sidelines with respect to the company in the newsletter portfolios. Shares yield 1.9%.


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