![]() ![]() In Q2, the company’s revenue fell 9% year-over-year (y-o-y) to $24.96 billion. Trefis estimates Lowe’s Q3 2023 revenues to be around $20.96 Bil, almost matching the consensus estimate. (1) Revenues expected to come in line with consensus estimates Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could LOW face a similar situation as it did in 20 and underperform the S&P over the next 12 months – or will it see a strong jump? Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index less of a roller-coaster ride as evident in HQ Portfolio performance metrics. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks for heavyweights in the Consumer Discretionary sector including AMZN, TSLA, and TM, and even for the megacap stars GOOG, MSFT, and AAPL. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 18% in 2023 (YTD) – indicating that LOW underperformed the S&P in 20. However, the increase in LOW stock has been far from consistent. an increase of about 20% for the S&P 500 over this roughly 3-year period. LOW stock has shown strong gains of 30% from levels of $160 in early January 2021 to around $205 now, vs. Looking ahead, the home improvement retailer expects total sales of approximately $87 billion to $89 billion for the full year 2023, comparable sales to be down -2% to -4%, and adjusted operating margin in the range of 13.4% to 13.6%. The do-it-yourself customer was less eager to spend on remodels and upgrades compared to last year, in part thanks to short-term issues like weather and inflation. ![]() ![]() Its customer mix disproportionately impacted Lowe’s results in the fiscal first half of 2023. We expect the company’s stock to see little movement post-third-quarter results – as its revenue and earnings are expected to almost match the consensus estimates. Lowe’s (NYSE: LOW), a home-improvement retailer, is scheduled to report its fiscal third-quarter results on Tuesday, November 21. ![]()
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