The home improvement retail company, Lowe’s Companies Inc. posted its quarterly earnings report and 2017 outlook last Wednesday, impressing the markets with a strong performance from the past year and optimistic forecast for the entire year. With this news, bulls sent the company stock (NYSE: LOW) to surge in the market in the trading session.
Lowes Stock Overview
Lowe’s performed remarkably on the first trading session of March, surging $7.08, or 9.52% to $81.45 per share in the market. As of the market close on Wednesday, Lowe’ market value is now at $70.85 billion, with a dividend yield of 1.83%. In the previous session, LOW was only trading at $74.37 and was trading around the $70+ rate since its stock plunged last August 2016.
With an RSI of 71.752 and MACD of 1.400, Lowes stock has a ‘Buy’ rating from analysts. From a technical perspective, LOW performs well, gaining a ‘Strong Buy’ rating with a bull rating of 3.95. Meanwhile, for Lowes Bollinger bands, the upper band touches the 29.95 level, lower band at 28.34, while the average rate is at 29.15. Its StochRSI has an overbought rating at 88.481.
As of the latest market close, Lowes shares reached a 52-week high, gaining more bullish sentiments from investors. Prior to Lowe’s latest stock surge, the retail company was previously trading at levels $66 - $78 per share when its stock plunged last August 16, 2016 from $82.32 to $75.81, down by 5.65%, or $4.60 due to earnings miss.
Lowe’s stock further plunged last November 2016, as the retail company reported yet another disappointing quarterly earnings and revenue, missing analysts forecast. The stock then fell another 3% to $65.12 per share.
Meanwhile, Lowe’s repurchased $552 million worth of its stocks under its stock repurchase program, while paying $306 million in dividends for the fourth quarter. For full year stock repurchases, Lowe’s reacquired a total of $3.5 billion stocks and paid $1.1 billion in dividends.
Latest Earnings Report
The American retail store’s most recent quarterly report that ended February 3 included improved revenue, up by 19.3% to $15.78 billion, surpassing market expectations of $15.39 billion. The company’s comparable store sales rose 5.1% with diluted earnings per share at $0.74 and adjusted diluted earnings per share of $0.86 for the fourth quarter, which climbed 45.8% from $0.59 adjusted diluted EPS in the fourth quarter of 2015.
Meanwhile, net earnings reached $3.1 billion, with diluted EPS of $3.47 for the fiscal year that ended February 3, 2017.
Lowe’s also reported strong sales, up by 19.2% to $15.8 billion versus the $13.2 billion during the fourth quarter of 2015, while comparable sales rose 5.1%. On the other hand, full year sales exhibited a 10.1% boost, coming in at $65 billion, with comparable store sales 4.2% higher for the full fiscal year.
“We achieved strong fourth quarter results, delivering comparable sales growth and adjusted earnings per share above our expectations,” said Lowe’s president, CEO, and Chairman Robert Niblock. “We’ve entered 2017 well-positioned to capitalize on a favorable macroeconomic backdrop for home improvement by continuing to execute on our strategies to expand customer reach and develop capabilities to anticipate and support their needs,” he added.
Lowe’s benefitted from strong housing demand from the market, with its rival Home Depot also reporting string holiday sales.
For fiscal year 2017, Lowe’s expects their total sales to climb 5%, while comparable store sales are predicted to increase 3.5%. An additional 35 more home improvement and hardware stores are expected to be added to Lowe’s many branches. For the diluted EPS, the company sees it to reach around $4.64 per share.
The better-than-expected results was well-received by Lowe’s investors given that the retail company previously reported dismal earnings report for the third quarter, falling behind its competition Home Depot. With the company’s improved sales and overall performance, investors are extremely bullish over LOW stock. Investors should continue to monitor Lowe’s stock while it’s performing really strong in the market.
Proven by the past three quarterly reports and the stock’s movement, it can be interpreted that Lowe’s quarterly earnings report, whether good or bad, has had strong influence on the company’s stock movement. Hence, it is advised for Lowe’s Companies Inc. investors to monitor for financial reports to predict possible price direction of the stock..
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