{"id":52616,"date":"2023-08-24T18:12:55","date_gmt":"2023-08-24T22:12:55","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/buy-lowes-stock-its-courting-contractors\/"},"modified":"2023-08-24T18:12:57","modified_gmt":"2023-08-24T22:12:57","slug":"buy-lowes-stock-its-courting-contractors","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=52616","title":{"rendered":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors."},"content":{"rendered":"
\n

\n Lowe\u2019s
\n proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That makes the stock worth owning, even after the 9% rally it has had since Barron\u2019s<\/em> recommended it on Jan. 25. <\/p>\n

At a glance, the quarter didn\u2019t look all that exciting. Sales, which fell 9.2% year over year to about $25 billion, were just in line with analysts estimates, as higher mortgage rates dented demand for housing-related goods. Lowe\u2019s (ticker: LOW), though, was able to beat earnings-per-share forecasts thanks to rising gross profit margins\u2014which got a boost from falling transportation costs\u2014and continued share buybacks. It reported a profit of $4.56 a share, topping forecasts for $4.47. <\/p>\n

\n

Lowe\u2019s also maintained its full-year guidance for sales of $88 billion, at the midpoint of the estimated range, and earnings of $13.40 a share. But the decision not to raise that forecast is nothing to worry about, either. Those numbers should have gone up, since the company is growing far faster quarter over quarter than year over year. Overall, this indicates that management is likely providing a conservative projection given the current economic conditions, making expectation-beating earnings more likely later this year. <\/p>\n

\u201cThe near term is so choppy\u2014it makes no sense to say, \u2018Hey, we\u2019re going to raise full-year guidance,\u2019 \u201d says Edward Jones analyst Brian Yarbrough. \u201cYou\u2019d rather\u2026underpromise and overdeliver.\u201d <\/p>\n

Meanwhile, Lowe\u2019s continues to grow its \u201cpro\u201d sales, which rose this past quarter. Pros, or home-improvement contractors, is an area where Lowe\u2019s has been trying to make inroads. Historically dominated by
\n Home Depot
\n (HD), those sales tend to be steadier than for the do-it-yourself, or DIY, customer, which dropped more than 9% this past quarter. <\/p>\n

Jefferies analyst Jonathan Matuszewski writes that he sees \u201cpowerful pro initiatives\u201d continuing from here. <\/p>\n

If Lowe\u2019s can continue to grow the pro business as it takes market share from smaller companies, and DIY eventually stabilizes, sales should return to growth and drive earnings even higher. <\/p>\n

Analysts\u2019 consensus estimates call for annualized sales growth of just over 3% for the three years ending in 2026, to just over $97 billion in 2026, according to FactSet. Operating margins should rise toward Home Depot\u2019s, which benefited from its prowess in the pro segment. Add in share buybacks, and earnings per share should grow about 12% a year, to about $18.62 in 2026. <\/p>\n

That growth can take the stock higher\u2014but so would a higher valuation. Lowe\u2019s stock currently trades at about 16.5 times 12-month forward earnings, below Home Depot\u2019s 20.8 times. As Lowe\u2019s gets through the DIY rough patch, executes on its strategy, and moves its margins closer to Home Depot\u2019s, its stock could command a higher valuation. <\/p>\n

If Lowe\u2019s can \u201cgrow earning by double digits, it could be a 20% compounder,\u201d Yarbrough says of the stock. \u201cYou\u2019ve got earnings growth, and then multiple expansion.\u201d<\/p>\n

Lowe\u2019s doesn\u2019t just improve homes. It can improve a portfolio, as well. <\/p>\n

Write to <\/strong>Jacob Sonenshine at jacob.sonenshine@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That makes the stock worth owning, even after the 9% rally it has had since Barron\u2019s recommended it on Jan. 25. At a glance, the quarter didn\u2019t look all […]<\/p>\n","protected":false},"author":1,"featured_media":52617,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-52616","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBuy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=52616\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=52616\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-24T22:12:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-24T22:12:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/08\/1692915176_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52616#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52616\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors.\",\"datePublished\":\"2023-08-24T22:12:55+00:00\",\"dateModified\":\"2023-08-24T22:12:57+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52616\"},\"wordCount\":518,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=52616#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52616\",\"url\":\"https:\/\/ifintechworld.com\/?p=52616\",\"name\":\"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-08-24T22:12:55+00:00\",\"dateModified\":\"2023-08-24T22:12:57+00:00\",\"description\":\"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=52616#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=52616\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=52616#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors.\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld","description":"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=52616","og_locale":"en_US","og_type":"article","og_title":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld","og_description":"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That","og_url":"https:\/\/ifintechworld.com\/?p=52616","og_site_name":"iFintechWorld","article_published_time":"2023-08-24T22:12:55+00:00","article_modified_time":"2023-08-24T22:12:57+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/08\/1692915176_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=52616#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=52616"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors.","datePublished":"2023-08-24T22:12:55+00:00","dateModified":"2023-08-24T22:12:57+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=52616"},"wordCount":518,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=52616#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=52616","url":"https:\/\/ifintechworld.com\/?p=52616","name":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors. | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-08-24T22:12:55+00:00","dateModified":"2023-08-24T22:12:57+00:00","description":"Lowe\u2019s proved, with its earnings this week, that it can hang in there during a rough stretch for the economy\u2014and keep growing on the other side. That","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=52616#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=52616"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=52616#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Buy Lowe\u2019s Stock. It\u2019s Courting Contractors."}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=52616"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52616\/revisions"}],"predecessor-version":[{"id":52618,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/52616\/revisions\/52618"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/52617"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}