Core Insights - Lowe's Companies, Inc. is focusing on long-term growth through its 2025 Total Home Strategy, which emphasizes innovation and operational efficiency [2][6] - The company is facing challenges in its DIY segment due to changing consumer spending habits, impacting overall sales performance [3][6] - Lowe's is exposed to potential risks from tariff increases as approximately 40% of its cost of goods sold is sourced from outside the United States [4] Strategy and Growth Initiatives - The 2025 Total Home Strategy includes five key pillars: driving Pro penetration, accelerating online sales, expanding home services, creating a loyalty ecosystem, and maximizing space productivity [2] - Lowe's is launching an advanced AI framework to enhance customer experience and operational efficiency [2] - The company plans to open 10-15 new stores annually in fast-growing U.S. markets and expand its rural store presence to nearly 500 [9] Financial Performance and Market Position - In the past six months, Lowe's shares have gained 7.5%, underperforming compared to the industry and S&P 500 growth of 10.8% and 9.2%, respectively [5][12] - Lowe's forward 12-month price-to-earnings (P/E) multiple is 19.84x, indicating it may be undervalued compared to its historical and industry benchmarks [13][14] - The company aims to achieve approximately $1 billion in annual cost savings through its Perpetual Productivity Improvement initiatives [10] Customer Engagement and Loyalty Programs - Lowe's is launching the first product marketplace in the U.S. home improvement industry to provide customers with a wider range of options [8] - The Pro loyalty program is being revamped as MyLowe's Pro Rewards, offering tailored benefits for professional customers [8]

Core Viewpoint - Lowe's Companies, Inc. is currently trading at a forward 12-month P/E ratio of 20.12, which is below the industry average of 23.98 and the S&P 500's P/E of 22.67, but above its median P/E of 18.71 over the past year [1][4][21] Valuation and Stock Performance - The recent decline in Lowe's stock price, down 3% over the past month, contrasts with the industry's 1.7% gain, contributing to its discounted P/E [4][21] - Lowe's stock closed at $249.81, which is 13% below its 52-week high of $287.01 reached on October 15, 2024, and is trading below its 50-day moving average, indicating a potential slowdown in momentum [7][21] Strategic Initiatives - Lowe's has introduced its 2025 Total Home Strategy, focusing on Pro penetration, e-commerce acceleration, home services expansion, and customer loyalty programs to enhance market share [10] - The company has achieved a 30% market share in Pro penetration and plans to relaunch its Pro loyalty program as "MyLowe's Pro Rewards" in early 2025, offering a 5% discount for cardholders [11] - Lowe's has launched the first product marketplace in the U.S. home improvement industry, expanding its digital assortment and catering to various customer segments [12] - The integration of AI technology aims to improve online search, product recommendations, and demand planning, enhancing operational efficiency [13] - Lowe's plans to open 10-15 new stores annually in high-growth U.S. markets and extend its rural offering to 150 additional stores, totaling nearly 500 [14] Market Challenges - The company faces significant pressure in its DIY discretionary categories, particularly in larger projects, with comparable sales down 1.1% in Q3 of fiscal 2024 and expectations of a 3% to 3.5% decline for the current fiscal [15][16] - Intense competition from rivals like The Home Depot, Floor & Decor, and Builders FirstSource poses challenges for maintaining or growing market share [18] - Approximately 40% of Lowe's cost of goods sold is sourced from outside the U.S., making it vulnerable to potential tariff increases, which could impact margins [19] Consensus Estimates - The Zacks Consensus Estimate for Lowe's earnings per share has been revised downward, with a decrease of two cents to $1.81 for Q4 of fiscal 2024 and five cents to $3.12 for Q1 of fiscal 2025 [20] Final Assessment - Lowe's appears attractive relative to industry peers but slightly expensive compared to its historical median level, with recent stock price dips and trading below the 50-day moving average suggesting caution [21][22] - Strategic initiatives and potential benefits from lower borrowing costs due to recent interest rate cuts may enhance growth potential, but the balance of risks and rewards suggests a prudent approach for investors [22]

Core Insights - Lowe's Companies, Inc. highlighted its financial targets for both the near-term and long-term during the 2024 Analyst and Investor Conference, introducing a standardized framework to leverage generative AI for enhancing customer experiences and productivity [1] Financial Outlook - Lowe's reaffirmed its FY24 sales projection between $83 billion and $83.5 billion, with a consensus estimate of $83.34 billion [3] - The company expects comparable sales to decline by 3.0% to 3.5% and adjusted EPS to be between $11.80 and $11.90, with a consensus estimate of $11.89 [4] - An analyst estimates FY24 sales at $83.3 billion, comparable sales at -3.3%, and adjusted EPS at $11.87 [6] Strategic Initiatives - Lowe's launched the first product marketplace in the U.S. home improvement industry, partnering with new sellers and existing suppliers to enhance its online offerings [2] - The company plans to relaunch MyLowe's Pro Rewards in early 2025, simplifying the rewards process for small-to-medium Pro customers, allowing them to save 5% daily on eligible purchases [3] - Lowe's aims to open 10-15 stores annually in fast-growing U.S. markets and expand rural assortments to 150 more stores, enhancing selections in various categories [4][5] Leadership Commentary - Marvin R. Ellison, Lowe's chairman, president, and CEO, emphasized the company's investments for long-term growth and the evolution of its Total Home strategy to meet customer needs [5] Market Position - Goldman Sachs analyst rated Lowe's as a Buy with a price target of $276, indicating positive market sentiment [5] - As of the last check, LOW shares were down 0.31% at $269.28 [7]

Core Insights - Lowe's held its annual investor day, outlining plans for 2025 and beyond, focusing on returning to revenue growth [1][2] - The company anticipates a decline in sales for 2024 due to inflation and a sluggish housing market [1][4] - Lowe's aims to increase market share among professional contractors and expects an improved housing market to positively impact sales [1][3] Financial Projections - For fiscal 2024, Lowe's projects revenue between $83 billion and $83.5 billion, a decrease from $86.38 billion in fiscal 2023, with comparable store sales expected to decline by 3% to 3.5% [4] - Looking ahead to fiscal 2025, Lowe's forecasts potential sales growth, estimating revenues could range from $82 billion to $87 billion depending on market conditions [5][6] Market Trends and Strategies - The retailer plans to enhance its offerings with a revamped rewards program and expanded online product selection to attract both DIY customers and professional contractors [3][7] - Over the next three to five years, factors such as lower mortgage rates and increased consumer confidence are expected to drive sales growth [7] - The company acknowledges the impact of macroeconomic factors on consumer spending, particularly in the "big ticket" categories [8][9]

Core Viewpoint - Lowe's Companies, Inc. is updating its long-term financial targets and growth initiatives during its 2024 Analyst and Investor Conference, focusing on enhancing customer experience and driving productivity through technology and strategic investments [1][2]. Growth Initiatives - The company is evolving its Total Home strategy, which includes five key growth initiatives: Drive Pro Penetration, Accelerate Online Sales, Expand Home Services, Create a Loyalty Ecosystem, and Increase Space Productivity [2]. - Lowe's has achieved a 30% penetration rate among Pro customers, indicating strong momentum in this segment [2]. Technology and Innovation - A new AI framework has been developed to enhance customer experience and productivity, leveraging partnerships with leading tech platforms like NVIDIA, OpenAI, and Palantir [2]. - The company is piloting new AI solutions to improve the in-store shopping experience for customers [3]. Marketplace Expansion - Lowe's has launched the first product marketplace in the U.S. home improvement industry, allowing new sellers and existing suppliers to offer their full product catalogs without the need for inventory management [4]. Loyalty Programs - The Pro loyalty program is being relaunched as MyLowe's Pro Rewards in early 2025, designed for small-to-medium Pro customers, offering easier reward earning and redemption [5]. - The company is integrating its DIY and Pro loyalty programs into a single ecosystem to enhance value for different customer segments [6]. Delivery and Service Enhancements - Lowe's is launching a Pro Extended Aisle to improve jobsite delivery through a direct interface with supplier systems, aiming to capture more planned Pro spending [7]. Store Growth Strategy - The company plans to open 10-15 new stores annually in fast-growing U.S. markets, while also extending its rural offerings to 150 more stores, bringing the total rural store count to nearly 500 [8]. Financial Outlook - Lowe's is providing scenario planning details for its 2025 financial performance, with expectations of generating approximately $1 billion in annual cost savings through new productivity initiatives [9]. - The company affirms its full-year 2024 outlook, projecting total sales between $83.0 billion and $83.5 billion, with comparable sales expected to decline by 3.0% to 3.5% [11][13].

Company Overview - Lowe's Companies is the world's second-largest home improvement chain with trailing-12-month sales of $83.7 billion, following Home Depot [1] - The company has generated a total return of 245,200% over the past 50 years, creating significant wealth for early shareholders [1] Current Challenges - The retail stock is trading near its peak with a market capitalization of $150 billion, raising questions about its potential to create new millionaires [2] - The company is experiencing softer demand from customers due to macroeconomic headwinds, including higher interest rates and inflation [2] Financial Performance - In Q3 2024, Lowe's reported revenue of $20.2 billion, a decline of 1.5% year over year, attributed to a 1.1% decrease in same-store sales [3] - The company noted weakness among DIY customers, who are hesitant to engage in costly renovation projects [4] Future Outlook - Management has raised its full-year revenue guidance to between $83 billion and $83.5 billion for fiscal 2024, an increase of $300 million from previous estimates [5] - The Federal Reserve's interest rate cuts may stimulate economic growth, potentially increasing demand for Lowe's products as households may resume renovation projects [6] Industry Trends - The median age of homes in the U.S. was 40 years in 2022, up from 31 in 2005, indicating a trend that favors home improvement spending [7] - There is a documented housing inventory shortage of 4 million to 7 million homes, encouraging consumers to invest in home improvements rather than purchasing new homes [7] Valuation and Capital Returns - Lowe's shares have outperformed the market, with a total return of 157% since late November 2019 [8] - The current price-to-earnings (P/E) ratio is 22.9, slightly below the trailing-10-year average and lower than the S&P 500's P/E ratio of 24.7 [8] - The company has a strong capital allocation policy, having paid dividends for over 25 years and repurchasing $758 million worth of stock in the last three months [9] Investment Consideration - Lowe's shares are trading at a 22% discount compared to its main rival, Home Depot, making it an attractive option for investors [10] - However, potential investors should temper expectations regarding future returns, as the company is large and past performance may not be indicative of future results [10]

Core Viewpoint - Lowe's Companies is perceived as a stable investment option despite challenges, being the second-largest home improvement retailer in the U.S. after Home Depot [1] Company Overview - Lowe's operates 1,747 stores across all 50 U.S. states, nearing market saturation, with limited expansion opportunities as it has exited international markets [3] - The company is classified as a value stock, which may lead to slower growth prospects [3] Financial Performance - For the first nine months of fiscal 2024, Lowe's reported revenue of $65 billion, a 4% decline from the same period in fiscal 2023, with net income at $5.8 billion, down 13% year-over-year [6] - Projected revenue for fiscal 2024 is $83 billion, indicating a decline of just under 4%, with analysts forecasting less than 2% growth for fiscal 2025 [7] Dividend and Shareholder Incentives - Lowe's offers an annual dividend of $4.60 per share, yielding 1.7%, which is higher than the S&P 500's yield of 1.2%, and has a history of annual payout increases for over 50 years [4] - Long-term shareholders are incentivized to hold the stock due to the reliable dividend, despite the company's slow growth profile [11] Growth Strategy - CEO Marvin Ellison's "Total Home Strategy" aims to drive growth through increased ties with professional contractors, higher online sales, more installation services, localization, and enhanced product assortment [5] - The strategy may benefit from falling interest rates, although demand for discretionary home improvement projects has been affected by inflation [5] Market Position and Valuation - Lowe's stock has slightly outperformed the S&P 500 over the past year, but its P/E ratio of 23 is above its five-year average of 20, suggesting limited upside potential [8] - The company faces challenges in generating revenue growth without significant store additions, particularly after exiting Canada and Mexico [10]

Group 1: Company Performance and Analyst Ratings - Following its third-quarter earnings report, several Wall Street analysts raised their price targets on Lowe's Companies, with Truist's Scot Ciccarelli increasing his target to $310 while maintaining a buy rating on the stock [1] - Lowe's is seen as a beneficiary of an improving outlook for home spending, driven by lower mortgage rates and an increase in home sales, which typically leads homeowners to spend on improvements [2] Group 2: Market Conditions and Trends - The home improvement sector has gained attention this year due to expectations of a falling-interest-rate environment, although market and mortgage rates have moved in the opposite direction despite Federal Reserve rate cuts [2][4] - Historical trends suggest that market rates will eventually decline, but this may take longer than what current valuations for home improvement stores imply [4] Group 3: Sales and Financial Metrics - There is ongoing pressure on larger-ticket discretionary item sales, with Lowe's expecting comparable sales to decline by 3% to 3.5% in 2024 [6] - The EV to EBITDA (Forward) ratio for Lowe's is 19.04, while for Home Depot it is 18.00, indicating competitive valuation metrics [5] Group 4: Alternative Investment Opportunities - While Lowe's and Home Depot are prominent options in the home improvement sector, their valuations suggest limited upside potential, leading to consideration of better-value alternatives such as Pentair, Whirlpool, and Owens Corning [7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 1, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number 1-7898 LOWE'S COMPANIES, INC. (Exact name of registrant as specified in its charter) North Carolina 56-0578072 (Stat ...

Group 1 - Lowe's is a market leader in the home improvement market, benefiting from scale, leading private label brands, and strong vendor relationships [1] - The stock price of Lowe's has seen significant gains this year, yet its valuation remains reasonable [1] - The company is recognized as a Dividend Aristocrat, indicating a strong commitment to dividend growth [1] Group 2 - The focus on dividend growth investing highlights the importance of sustainable dividend growth and capital appreciation potential in large-cap stocks [1] - There is an emphasis on the growth potential of tech and small- or mid-cap stocks, regardless of dividend status [1]