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Lowe's (LOW) to Post Q3 Earnings: What Awaits the Stock?

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Lowe's Companies, Inc. (LOW - Free Report) is likely to register a top-line decline when it reports third-quarter fiscal 2021 numbers on Nov 17, before the opening bell. Nevertheless, the bottom line is likely to project growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $21,833 million, indicating a decline of 2.1% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings went up 5 cents in the past seven days and is currently pegged at $2.32 per share. The consensus mark suggests a rise of 17.2% from earnings of $1.98 reported in the year-ago quarter. The company delivered an earnings surprise of 6.5% in the last reported quarter. It has a trailing four-quarter earnings surprise of 10.1%, on average.

Key Aspects to Note

Lowe's performance in the third quarter is likely to have been affected by tough year-over-year comparisons, owing to the lapping of last year’s strong demand conditions backed by higher stay-at-home trends.

Nevertheless, the company is likely to have gained from customers’ continued investments in home remodeling, repair and maintenance projects, even if it is not as high as year-ago quarter’s levels. Industry experts opine that consumers’ discretionary spending on home improvement is likely to continue, as interests of keeping homes well maintained are here to stay. This is likely to have favored Pro and DIY (do-it-yourself) customer sales.

Lowe's is expected to have benefited from solid omni-channel offerings in the quarter to be reported. It has been investing toward enhancing customers’ online shopping experience by improving features like search and checkout. The company completed the installation of Buy Online Pickup in Store touchless lockers across stores. Lowe's is also gaining traction with the Total Home strategy that includes providing complete solutions for various types of home repair and improvements needs.

 

Lowe's Companies, Inc. Price, Consensus and EPS Surprise

 

Lowe's Companies, Inc. Price, Consensus and EPS Surprise

Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote

 

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Lowe's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lowe’s has a Zacks Rank #2 and an Earnings ESP of +5.71%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With Favorable Combination

Here are some more companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat:

Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +1.00% and a Zacks Rank of 1. The company is expected to register bottom-line growth when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings of $2.59 per share suggests growth of 13.1% from the year-ago quarter’s reported figure

Costco’s top line is also expected to rise year over year. The consensus mark for revenues is pegged at $49.6 billion, indicating an increase of 14.8% from the figure reported in the year-ago quarter. COST’s shares have increased 14.2% in the past three months compared with the industry’s growth of 2.9%.

The Home Depot, Inc. (HD - Free Report) currently has an Earnings ESP of +1.42% and a Zacks Rank of 2. The company is expected to register bottom-line growth when it reports third-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings of $3.40 per share suggests growth of 6.9% from the year-ago period’s reported figure

Home Depot’s top line is also expected to rise year over year. The consensus mark for revenues is pegged at $34.8 billion, indicating an increase of 3.7% from the figure reported in the year-ago quarter. HD’s shares have returned 11.2% in the past three months compared with the industry’s growth of 14.3%.

Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +3.59% and a Zacks Rank of 2. The company is expected to register bottom-line growth when it reports third-quarter 2021 results. The Zacks Consensus Estimate for quarterly earnings of 36 cents per share indicates a rise of 5.9% from the year-ago quarter’s figure

Fastenal’s top line is also expected to rise year over year. The consensus mark for revenues is pegged at $1.48 billion, calling for an increase of 9% from the figure reported in the year-ago quarter. FAST’s shares have risen 8.3% in the past three months compared with the industry’s growth of 14.3%.

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