Lowe’s Q1 Earnings Could Boost Its Stock Price



Stock performance

Lowe’s Companies (LOW) is scheduled to release its first-quarter earnings before the market opens on May 22. As of May 16, Lowe’s was trading at $108.59—a rise of 3.4% since the announcement its fourth-quarter earnings on February 27. The company was trading at a premium of 28.1% from its 52-week low of $84.75. Lowe’s was trading at a discount of 8.2% from its 52-week high of $118.23.

In the fourth quarter, Lowe’s revenues and SSSG (same-store sales growth) fell short of analysts’ expectations. However, the company posted an SSSG of 5.8% in January. The improvement in the company’s SSSG in the US market and management’s forecast of a strong economic outlook for the US in 2019 contributed to the rise in Lowe’s stock price. Investors are optimistic about Marvin Ellison’s turnaround initiatives, which could have also contributed to the increased stock price.

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YTD performance

Lowe’s has returned 17.6% YTD (year-to-date) and outperformed Home Depot (HD) and the S&P 500 Index (SPY). Home Depot has returned 12.0% YTD, while the S&P 500 Index has returned 14.7%. The SPDR S&P Homebuilders ETF (XHB), which invests in home improvement and furnishing companies, has returned 24.5% since the beginning of this year.


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