Lowe's Companies, Inc. ( LOW Quick Quote LOW - Free Report) recently shared updates on fiscal 2021 and fiscal 2022 as well as announced a new share repurchase authorization. Management highlighted that LOW is focused on its Total Home Strategy, which targets productivity boost and enrichment of the integrated omni-channel shopping experience. These growth factors are likely to drive market share gains across both Lowe’s DIY and Pro categories. Lowe’s shares have inched up nearly 2% during the trading hours on Dec 15. This currently Zacks Rank #1 (Strong Buy) stock has surged 36.7% in the past three months compared with the industry’s 12.1% rally. You can see . the complete list of today’s Zacks #1 Rank stocks here Let’s delve deeper. Outlook
For fiscal 2021, Lowe’s continues to project total sales of about $95 billion, implying growth of 6% from the last fiscal year’s reported figure. Also, comparable sales are forecast to grow nearly 33% on a two-year basis. The Zacks Consensus Estimate for fiscal 2021 sales is currently pegged at $95.7 billion.
The gross margin rate remains 33.10%, representing slight growth year over year. Operating margin is still anticipated to be 12.4% while ROIC of more than 33% is expected for fiscal 2021. During the third quarter of fiscal 2021, Lowe’s bought back 13.7 million shares worth $2.9 billion and paid out dividends of $563 million. Management had earlier anticipated repurchasing shares worth $3 billion in the fiscal fourth quarter, indicating a total buyback of $12 billion for the current fiscal year. For fiscal 2022, management estimates total sales between $94 billion and $97 billion, including the 53rd week. The said week is likely to raise sales nearly $1-$1.5 billion. Comparable sales are predicted in the range of a 3% decline to flat from the last fiscal year’s reported number. This might be due to sluggish home-improvement demand. The Zacks Consensus Estimate for fiscal 2022 sales is currently pegged at $97 billion. For fiscal 2022, the gross margin rate is likely to remain flat from the year-ago reported number while the operating margin is expected in the band of 12.5-12.8%. Further, management projects an interest expense of $1-$1.1 billion and an effective income tax rate of around 25% for the said fiscal. As a result, earnings per share are envisioned in the band of $12.25-$13 for fiscal 2022. The consensus mark for fiscal 2022 earnings stands at $12.82. Management expects repurchase of shares worth $12 billion. Lowe’s anticipates ROIC of roughly 35% for the fiscal and capital expenditures of approximately $2 billion. What Else?
Lowe’s remains committed to maximizing shareholder value through a discreet and efficient capital-allocation strategy. Given LOW’s cash flow generation capabilities and growth strategies, the company’s board authorized a new $13-billion share repurchase program.
The new buyback plan has no expiration date and further adds to the earlier program's balance, having $7.3 billion as of Dec 14, 2021. This brings Lowe’s current total share repurchase authorization of around $20 billion.
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