Shares of home improvement retailer Lowe’s Companies (LOW) are down in today’s trading as investors await its Q2 earnings results on August 20 before the market opens. Analysts are expecting earnings per share to come in at $3.98 on revenue of $23.96 billion. This represents a decline from the $4.56 per share seen in the year-ago period, according to TipRanks’ data.
However, it seems likely that the firm will beat earnings estimates, as it has done so every quarter since its 2020 Q4. However, the beats have rarely been large enough for investors to hope it will exceed last year’s figure.
Nevertheless, there are still good reasons to be hopeful. According to TipRanks’ Bulls Say, Bears Say tool, analysts seem to have a strong appreciation for the firm’s operational performance. Indeed, one of the bullish arguments points to how Lowe’s has been capitalizing on investments it has made to better serve small and medium-sized professionals.
Even one of the bearish arguments can be viewed as a positive indicator of its operational skills. Although demand didn’t significantly increase during the first quarter, it still outperformed due to effective and targeted spring promotion execution.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a 4.37% move in either direction.
Is LOW Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on LOW stock based on 11 Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 12% rally in its share price over the past year, the average LOW price target of $254.37 per share implies 6.17% upside potential.
