Lowe’s: Investors Are Confident before Its 1Q17 Earnings
Lowe’s (LOW) is scheduled to announce its 1Q17 earnings before the market opens on May 24, 2017. Since the announcement of its 4Q16 earnings on March 1, 2017, the stock has risen 15.1%.
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In 4Q16, Lowe’s posted adjusted EPS (earnings per share) of $0.86 on revenue of $15.8 billion. Analysts were expecting the company to post EPS of $0.79 on revenues of $15.4 billion. Better-than-expected 4Q16 earnings along with the rise in the US housing price index, improving employment data, and higher home sales in March 2017 increased investors’ confidence. Increased confidence led to a rise in Lowe’s stock price.
In March 2017, the National Association of Realtors reported that home sales rose 4.4%. In February 2017, the S&P CoreLogic Case-Shiller US National Home Price NSA Index reported a rise of 5.8% in the national home price index. The unemployment rate fell to a ten-year low of 4.4% in April 2017.
Lowe’s started 2017 on a brighter note with its stock rising 20.3% since the beginning of 2017. During the same period, its peers Home Depot (HD), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY) have returned 17.3%, 5.8%, and -11.5%, respectively.
Comparatively, the SPDR S&P Homebuilders ETF (XHB) and the S&P 500 INDEX (SPX) have returned 12.3% and 7.3%, respectively.
With Lowe’s earnings just around the corner, we’ll look at analysts’ estimated revenue, margins, and earnings for 1Q17. In the end, we’ll wrap the series by looking at Lowe’s valuation multiple and analysts’ recommendations.
First, let’s start by looking at Lowe’s estimated revenue in 1Q17.