Lowe's Analysts Weigh In Unexpected Sales Dip And Revised Forecasts

Shares of Lowe's Companies Inc LOW were falling on Tuesday, after the company reported its third-quarter results.

The company reported a third-quarter FY23 sales decline of 12.8% year-on-year to $20.47 billion, missing the analyst consensus estimate of $20.88 billion.

Comparable sales decreased 7.4% due to a decline in DIY discretionary spending. The company repurchased about 7.3 million shares for $1.6 billion and paid $624 million in dividends in the quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Telsey Advisory Group On Lowe's Companies

Analyst Joseph Feldman maintained a Market Perform rating and price target of $225.

Lowe's third-quarter results were “mixed,” and the company slashed its 2023 guidance, Feldman said in a note. “The company reported 3Q23 adjusted EPS of $3.06, ahead of the FactSet consensus (FS) of $3.02, but below our estimate of $3.08,” he added.

Comparable sales came in below expectations, “due to weakness in DIY discretionary spending, especially big ticket items, which we believe is related to broad-based pressure on consumer spending, recovery from pulled-forward demand, and soft housing market trends,” the analyst further stated.

Check out other analyst stock ratings.

Goldman Sachs On Zoom Lowe's Companies

Analyst Kate McShane reaffirmed a Buy rating and price target of $252.

A decline in DIY discretionary spending was “partially offset by a positive comp for the Pro business,” McShane said.

“LOW lowered FY23 guidance due to lower-than-expected DIY sales and now expects sales of $86bn (from $87bn-$89bn), a comparable sales decline of 5% y/y (from -2% to -4%), adj. operating margin of 13.3% (from 13.4%-13.6%), and adj. EPS of approximately $13.00 (from $13.20-$13.60),” the analyst wrote. “We note the updated FY23 guidance implies 4Q adj. EPS of ~$1.60 and compares to current consensus of $1.97,” he added.

LOW Price Action: Shares of Lowe's were down 2.7%% to $198.77 at the time of publication Tuesday.

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