(LOW) Lowe’s Companies – Bear of the Day

We downgraded our recommendation on Lowe’s Companies (LOW) to Underperform following dismal second-quarter 2012 results. The quarterly earnings of $0.65 per share missed the Zacks Consensus Estimate of $0.70, and fell 4.4% year-over-year. Net sales slid 2% to $14,249 million, and fell short of the Zacks Consensus Estimate of $14,421 million.

Consequently, Lowe’s trimmed its outlook, as it remains concerned about the housing market and the sluggish economic recovery. Management now expects fiscal 2012 earnings to be $1.64, down from a range of $1.73 to $1.83 per share forecasted earlier. Management now projects total sales for fiscal 2012 to remain flat with fiscal 2011, and expects comparable-store sales growth of 0.5%.

We believe that spending on big remodeling projects will likely remain under pressure until the housing market stabilizes, inventory levels normalize and consumer-spending rebounds. Our target price of $28.00, 17.0X 2012 EPS, reflects this view.

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | Home Improvement Stores | Services

RSS feeds: LOW | Lowe's Companies Inc. | Home Improvement Stores | Services |

Other Posts by | RSS Feed for this author