On Thursday, Truist Securities made an adjustment to the price target for Lowe's Companies Inc (NYSE: NYSE:LOW), bringing it down to $307 from the previous $310 while still upholding a Buy rating on the stock. Currently trading at $263.82, with a market capitalization of $148.8 billion, Lowe's has demonstrated strong momentum with a 22.67% year-to-date return. The revision reflects a slight change in the firm's earnings per share (EPS) estimates for 2025 and 2026, influenced by Lowe's increased emphasis on debt reduction over share buybacks.
Lowe's recently confirmed its fourth quarter and full-year 2024 outlook, presenting three potential scenarios for fiscal year 2025: Robust, Moderate, and Weak. These scenarios aim to cover a range of possible outcomes for the company's performance. According to InvestingPro data, the company maintains strong financial health with annual revenue of $83.72 billion and operates with a moderate P/E ratio of 22.05. The Moderate scenario, which aligns closely with market expectations, was particularly noted to be in line with Truist Securities' forecasts.
In its analysis, Truist Securities highlighted several strategic initiatives that Lowe's is undertaking to gain market share. These include enhancements in merchandising, better utilization of store space, advancements in technology, supply chain improvements, and a concentrated effort on professional customers. Additionally, the company is developing alternative revenue streams through its Marketplace and Media businesses.
These initiatives, according to Truist Securities, position Lowe's to leverage the anticipated recovery in the home improvement sector and achieve double-digit EPS growth beyond 2026. Despite the modest reduction in the price target, the firm's outlook on Lowe's remains positive, encouraging investors to continue buying shares.
InvestingPro analysis indicates the stock is currently overvalued based on its proprietary Fair Value model, while maintaining a "GOOD" overall financial health score. Subscribers can access 8 additional ProTips and comprehensive financial analysis in the Pro Research Report.
In other recent news, Lowe's Companies Inc. has reaffirmed its full-year 2024 outlook, projecting total sales between $83.0 and $83.5 billion. As part of its 2025 Total (EPA:TTEF) Home Strategy, the company plans to launch the first product marketplace in the U.S. home improvement industry and relaunch its Pro loyalty program.
Additionally, Lowe's intends to open 10-15 new stores annually in rapidly growing U.S. markets. RBC Capital Markets has maintained a Sector Perform rating on Lowe's, adjusting its price target marginally to $292. Other firms, including Piper Sandler, Mizuho (NYSE:MFG) Securities, Bernstein SocGen Group, Evercore ISI, and Jefferies, have also adjusted their price targets, reflecting optimism about the company's recovery by 2026.
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