Lowe's Stock Uptrend Can Continue for These 2 Reasons

Core Viewpoint - Lowe's Companies has reaffirmed its 2025 outlook and capital return strategy, indicating a potential continuation of its stock price uptrend despite mixed quarterly results [1][8]. Financial Performance - Revenue contracted by 2.2% year-over-year, missing consensus estimates, with comparable sales down 1.7% due to weather and consumer-related weaknesses, although growth was noted in professional and online segments [6][8]. - GAAP earnings reported at $2.92, slightly ahead of consensus estimates, despite a faster contraction than revenue [7]. Guidance and Forecast - Lowe's forecasts revenue between$83.5 billion and $84.5 billion for 2025, with margins expected to remain strong [8]. - The 12-month stock price forecast is set at$276.17, indicating a potential upside of 20.97% based on 25 analyst ratings [9][12]. Shareholder Returns - The company has a dividend yield of approximately 2.01%, with a low payout ratio of about 40% of the 2025 earnings forecast, and a 5% increase in the 2024 payment is anticipated [10][11]. - Share repurchases have slowed but remain sufficient to offset share-based compensation, resulting in a net 2% decline in shares compared to the previous year [10]. Market Sentiment - Analysts maintain a Moderate Buy rating on Lowe's stock, with ongoing institutional buying expected to provide bullish momentum [12][13]. - Recent price target reductions from some analysts may limit potential gains, but overall coverage remains firm with a bullish bias [12].