Baird analyst Peter Benedict has revised the firm's price target for Lowe's (LOW, Financial), adjusting it down to $285 from the previous $295. Despite this reduction, the analyst maintains an Outperform rating on the stock. This update follows an analysis of the company's first-quarter results, which suggests that staying invested in Lowe's could be a prudent decision.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 31 analysts, the average target price for Lowe's Companies Inc (LOW, Financial) is $265.53 with a high estimate of $305.00 and a low estimate of $217.00. The average target implies an upside of 16.78% from the current price of $227.37. More detailed estimate data can be found on the Lowe's Companies Inc (LOW) Forecast page.
Based on the consensus recommendation from 37 brokerage firms, Lowe's Companies Inc's (LOW, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lowe's Companies Inc (LOW, Financial) in one year is $219.80, suggesting a downside of 3.33% from the current price of $227.37. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lowe's Companies Inc (LOW) Summary page.
LOW Key Business Developments
Release Date: May 21, 2025
- Sales: $20.9 billion in Q1 2025.
- Comparable Sales: Down 1.7%.
- Gross Margin: 33.4% of sales, up 19 basis points from last year.
- Operating Margin: 11.9%, declined 50 basis points versus prior year.
- Diluted Earnings Per Share: $2.92.
- Free Cash Flow: $2.9 billion in Q1.
- Inventory: $18.3 billion, in line with prior year.
- Pro Sales Growth: Mid-single-digit growth in Q1.
- Online Sales Growth: Up 6% in Q1.
- Capital Expenditures: $518 million in Q1.
- Dividends Paid: $645 million at $1.15 per share.
- Debt Repayment: $750 million in debt maturities repaid in April.
- Return on Invested Capital: 31% at the end of Q1.
- Fiscal 2025 Sales Outlook: $83.5 billion to $84.5 billion.
- Fiscal 2025 Operating Margin Outlook: 12.3% to 12.4%.
- Fiscal 2025 EPS Outlook: $12.15 to $12.40.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lowe's Companies Inc (LOW, Financial) achieved sales of $20.9 billion in the first quarter, with comparable sales down 1.7%, aligning with expectations.
- The company received recognition from J.D. Power for being number one in customer satisfaction among home improvement retailers.
- Lowe's Companies Inc (LOW) reported mid-single-digit growth in Pro sales, highlighting the success of their Pro product and service offerings.
- Online sales increased by 6% in the first quarter, driven by improvements in traffic and conversion rates.
- The acquisition of Artisan Design Group is expected to enhance Pro planned spend and position Lowe's Companies Inc (LOW) to gain share in a $50 billion market.
Negative Points
- Comparable sales were down 1.7%, reflecting ongoing pressure in DIY bigger ticket discretionary demand.
- The company faced a slower start to spring due to exceptionally unfavorable weather across much of the country in February.
- There is ongoing pressure in DIY discretionary project demand, impacting overall sales performance.
- SG&A expenses increased, de-levering 56 basis points due to lower sales volumes and higher healthcare-related costs.
- Lowe's Companies Inc (LOW) is experiencing challenges with bigger ticket project spend, particularly in interior categories like flooring and kitchens and bath.
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