Lowe’s (LOW) to Post Q2 Earnings: What Awaits the Stock?

Renowned home improvement products company — Lowe’s Companies, Inc. LOW — is likely to register a decline in top line, when it reports second-quarter fiscal 2021 numbers on Aug 18. Nevertheless, the bottom line is likely to project growth.

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The Zacks Consensus Estimate for revenues is pegged at $26,836 million, which suggests a drop of 1.7% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings went up 6 cents in the past seven days and is currently pegged at $3.97 per share. The consensus mark suggests a rise of 5.9% from earnings of $3.75 reported in the year-ago quarter. The company delivered an earnings surprise of 24.4% in the last reported quarter. It has a trailing four-quarter earnings surprise of 14.4%, on average.

Key Aspects to Note

Lowe’s top-line performance in the second quarter is likely to have been affected by tough year-over-year comparison, owing to the lapping of last year’s strong demand for home improvement products backed by higher stay-at-home trends. Now that the pandemic restrictions have eased, thanks to mass vaccinations, people are spending more time outdoors for work and other needs.

Industry experts opine that consumers’ discretionary spending on home improvement are likely to continue, even if it is not as high as year-ago levels. Americans continue to incline toward home-renovation projects, as interests of keeping houses well maintained are here to stay. Prolonged indoor stay this past year has made people realize the importance of their homes. Such trends are likely to have favored Lowe’s U.S. home-improvement business segment. Higher demand from DIY (do-it-yourself) and pro customers across channels is likely to have contributed to quarterly performance.

The company is likely to have benefited from solid omni-channel offerings in the quarter to be reported. In fact, investments in the digital realm have been helping the company meet DIY and pro customers’ needs. In this context, the company has been striving to boost curbside pickup services. It has completed installing Buy Online Pickup in Store self-service lockers across U.S. stores. Its efforts to expand website features, supply chain capabilities as well as assortments through the Total Home strategy bode well.

 

Lowes Companies, Inc. Price, Consensus and EPS Surprise

 



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Lowes Companies, Inc. Price, Consensus and EPS Surprise


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What the Zacks Model Unveils

Our proven model predicts an earnings beat for Lowe’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lowe’s has a Zacks Rank #3 and an Earnings ESP of +0.38%.

More Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that they also have the right combination of elements to post an earnings beat:

Target Corporation TGT has an Earnings ESP of +2.89% and a Zacks Rank #3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.44% and a Zacks Rank #3.

The Home Depot, Inc. HD currently has an Earnings ESP of +1.24% and a Zacks Rank #3.

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