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After Home Depot's Earnings, Is Lowe's Set to Surprise?
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Home Depot (HD - Free Report) reported better-than-expected fourth quarter results Tuesday on the back of a strong U.S. housing market. This has some investors looking promisingly towards fellow industry giant Lowe’s (LOW), which is set to report its Q4 earnings next week.
Earlier this week, Home Depot posted adjusted earnings of $1.69 per share, which topped the Zacks Consensus Estimate of $1.62 and marked a strong year-over-year surge. The Atlanta-based company’s Q4 revenues also topped estimates, thanks in part to a 7.5% jump in comparable-store sales (also read: Home Depot (HD - Free Report) Keeps Earnings Beat Trend in Q4, Guides FY18).
The industry bellwether’s strong performance could signal that Lowe’s is also due to post solid fourth quarter results. But how likely is the company to outperform? Let’s take a closer look.
Lowe’s is expected to see its quarterly earnings gain 2.33% to hit $0.88 per share, based on our current Zacks Consensus Estimates. The company’s full-year EPS figure is projected to climb by more than 13% to reach $4.52 per share. Yet these projections do not provide investors with enough information to gauge if Lowe’s is on track to surpass these estimates.
Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Lowe’s is currently a Zacks Rank #2 (Buy) and has an Earnings ESP of 1.03%. This means earnings estimates have been higher directly ahead of Lowe’s Q4 report date, so investors should consider this stock as one with strong prospects to beat earnings next week
Investors should note that Lowe’s topped earnings estimates last quarter by nearly 3%. Lowe’s is set to report its fourth-quarter and full fiscal year earnings before the opening bell on Wednesday, Feb. 28.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
After Home Depot's Earnings, Is Lowe's Set to Surprise?
Home Depot (HD - Free Report) reported better-than-expected fourth quarter results Tuesday on the back of a strong U.S. housing market. This has some investors looking promisingly towards fellow industry giant Lowe’s (LOW), which is set to report its Q4 earnings next week.
Earlier this week, Home Depot posted adjusted earnings of $1.69 per share, which topped the Zacks Consensus Estimate of $1.62 and marked a strong year-over-year surge. The Atlanta-based company’s Q4 revenues also topped estimates, thanks in part to a 7.5% jump in comparable-store sales (also read: Home Depot (HD - Free Report) Keeps Earnings Beat Trend in Q4, Guides FY18).
The industry bellwether’s strong performance could signal that Lowe’s is also due to post solid fourth quarter results. But how likely is the company to outperform? Let’s take a closer look.
Lowe’s is expected to see its quarterly earnings gain 2.33% to hit $0.88 per share, based on our current Zacks Consensus Estimates. The company’s full-year EPS figure is projected to climb by more than 13% to reach $4.52 per share. Yet these projections do not provide investors with enough information to gauge if Lowe’s is on track to surpass these estimates.
Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
Lowe’s is currently a Zacks Rank #2 (Buy) and has an Earnings ESP of 1.03%. This means earnings estimates have been higher directly ahead of Lowe’s Q4 report date, so investors should consider this stock as one with strong prospects to beat earnings next week
Investors should note that Lowe’s topped earnings estimates last quarter by nearly 3%. Lowe’s is set to report its fourth-quarter and full fiscal year earnings before the opening bell on Wednesday, Feb. 28.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>