The three major U.S. equity indexes closed higher again Friday. The Dow Jones industrials ended the day up 0.1%, the S&P 500 closed 0.92% higher and the Nasdaq Composite saw a gain of 1.88%. Six of 11 sectors closed higher, with energy (3.06%) and communications services (2.48%) posting the biggest gains. Health care (−1.28%) and utilities (−1.14%) trailed.
On Tuesday, the Bureau of Labor Statistics releases its producer price index (PPI) for October. Economists are expecting core PPI and PPI to tick higher. The monthly report on retail sales is due Wednesday, while Thursday and Friday bring data related to new home construction and existing home sales in October. The weekly report on jobless claims is due Thursday.
The three major indexes traded lower in Monday’s premarket session.
There were no notable earnings reports released on either Friday or Monday. But beginning Tuesday morning, many of the nation’s largest retailers will be reporting quarterly results, starting with Home Depot and Walmart before the markets open.
Here is a look at four companies, including two Dow components, on deck to report results first thing Wednesday morning.
Lowe’s
Over the past 12 months, the share price of Lowe’s Companies Inc. (NYSE: LOW) has decreased by about 11.6%. After posting a year-to-date high in early January, the shares have dropped almost 20%.
Earlier this month, Lowe’s said it was selling its 450 or so Canadian stores for $400 million. Investors have jumped on the stock, pushing it up nearly 8% since the announcement. The company is also expected to get a boost from declining home sales. Homeowners who were thinking about selling are likely to wait until the housing market improves and, if history is any guide, often spend money improving their homes so that they will sell for more when that happens.
Of 31 analysts covering the company, 19 have a Buy or Strong Buy rating. Another 11 rate the stock at Hold. At a recent share price of around $209.00, the upside potential to a median price target of $235.00 is 12.4%. At the high price target of $300.00, the upside potential is 43.5%.
Fiscal third-quarter revenue is forecast at $23.18 billion, which would be down 15.6% sequentially but up 1.1% year over year. Adjusted earnings per share (EPS) are expected to come in at $3.09, down 33.8% sequentially and 13.2% higher year over year. For the full 2023 fiscal year ending in January, analysts expect EPS of $13.53, up 12.4%, on sales of $96.89 billion, up 0.7%.
Lowe’s stock trades at 15.4 times expected 2023 EPS, 14.7 times estimated 2024 earnings of $14.27 and 13.2 times estimated 2025 earnings of $15.85 per share. The stock’s 52-week trading range is $170.12 to $263.31, and the company pays an annual dividend of $4.20 (yield of 2.01%). Total shareholder return for the past year is negative 9.9%.
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