Lowe’s (NYSE: LOW) is expected to release its third quarter tax results on Wednesday, November 17. We expect the company’s stock to trade lower after the third quarter results as its revenue and earnings are expected to slightly miss consensus estimates. In the next quarter, risks from growing outbreaks of Delta variants could increase disinfection, supply chain and labor costs. This, in turn, could weigh slightly on its third quarter net income. Our forecast indicates that Lowe’s valuation is $ 210 per share, almost 11% lower than the current market price of $ 235. Check out our interactive dashboard analysis at LowePre-earnings of: what to expect in the third quarter? for more details.
(1) Revenue should slightly miss consensus estimates
Trefis estimates Lowe’s third quarter 2021 revenue to be around $ 21.8 Bil, slightly lower than the consensus estimate of $ 22 billion. Lowe’s revenue edged up year-over-year (year-over-year) to $ 27.6 billion, driven by higher comparable sales expectations in the second quarter (-1.6% vs. -1.9 % consensus) – given the difficult comparison the company was up against last year. However, model sales grew 32% company-wide and its sales increased 21% on a two-year basis. It should be noted that a robust 21% year-over-year growth in Lowe’s professionals, a 10% increase in installation services and a 7% jump in online sales also contributed to the gains in the second quarter of 2021.
2) EPS likely to be lower than consensus estimates
Lowe’s second quarter 2021 earnings per share (EPS) is expected to be $ 2.32 per Trefis analysis, slightly lower than the consensus estimate of $ 2.36. The home improvement retailer posted solid second-quarter profit growth, up 14% year-on-year, thanks to a significant increase in its operating margin.
For fiscal 2021, we now forecast revenue of $ 93 billion for fiscal 2021, up 4% year-on-year. Looking at the result, we are now forecasting EPS at $ 11.34.
(3) Estimate of the share price lower than the current market price
Through our Lowe’s assessment, with an EPS estimate of around $ 11.34 and a P / E multiple of 18.6x for fiscal 2021, this translates to a price of 210, which is 11% lower than the current market price.
There are several actions that look like a Better bet that MEUGLER Stock. For a more in-depth comparison between the peer groups, it helps to see how they fare. LOW Stock Comparison With Peers shows how Lowe’s stacks up against its peers on the metrics that matter.
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