CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our 12-month target $10 to $221, 18x our FY 25 EPS view of $12.26 (down $0.93; we set FY 26 at $13.76), a premium to the five-year P/E of 17.1x, reflecting LOW’s operational execution. FQ4 EPS of $1.77 (-22.3% Y/Y) beat by $0.09 on revenue of $18.6B (-17% Y/Y), ~1% above consensus. Comparable sales (-6.2% Y/Y) improved from FQ3’s -7.4% with strong holiday sales offsetting, in part, Do-It-Yourself pull-back and weather headwinds. Online and Pro-segment comparable sales were flat. LOW’s Pro survey shows cautious optimism. EBIT margin contracted 50 bps as product mix was partly offset by productivity focus. Macroeconomic concerns tame LOW’s short-term view, but mid- to long-term catalysts (home shortage, household formation, and work from home) sustain LOW’s bullish view. FY 24’s 2.2% top-line contraction pairs with a 35-bp EBIT margin contraction yielding a 7.2% EPS contraction (mid-points). We think continued consumer strength supports above-guide targets, but service vs. good spend tames realization.