|Bid||58.81 x 800|
|Ask||58.81 x 900|
|Day's Range||58.73 - 60.74|
|52 Week Range||44.01 - 73.99|
|Beta (3Y Monthly)||0.87|
|PE Ratio (TTM)||18.74|
|Earnings Date||Nov 14, 2018 - Nov 19, 2018|
|Forward Dividend & Yield||1.72 (2.86%)|
|1y Target Est||62.16|
For the next four quarters, analysts are expecting Lowe’s Companies (LOW) to post EPS (earnings per share) of $5.42, which represents growth of 7.3% from $5.05 in the corresponding four quarters of the previous year. The revenue growth and share repurchases are expected to drive the company’s EPS growth. The revenue growth would likely be driven by the adoption of a new revenue recognition accounting standard, positive SSSG, and the addition of new stores.
After Credit Suisse’s downgrade on October 17, Lowe’s Companies’ (LOW) stock price fell to a low of $101.39 before closing the day at $102.44, which represents a fall of 3.3% from its previous day’s closing price.
On October 17, CNBC reported that Credit Suisse downgraded Lowe’s Companies (LOW) to “neutral” from “outperform” and also lowered its price target from $115 to $111. Credit Suisse analyst Seth Sigman stated, “Our key concern is that home prices will continue to moderate, at least temporarily, as higher rates weigh on affordability, and inventory creeps up. Of the 33 analysts that cover Lowe’s, 78.8% are favoring a “buy,” and 21.2% are favoring a “hold” rating.
Today, CNBC reported that Credit Suisse downgraded Home Depot (HD) stock from “outperform” to “neutral.” Credit Suisse lowered its price target from $222.00 to $204.00. The new price target represents an upside potential of 5.4% from its October 16 closing price of $193.58.
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Pottery Barn Kids, the premier specialty retailer for children’s home furnishings and decorative accessories, and a member of the Williams-Sonoma, Inc. portfolio of brands today announced its expansion into the United Kingdom.
Could RH’s Price Correction Mean a Buying Opportunity? For the next four quarters, analysts expect RH (RH) to post adjusted EPS of $7.57, which represents a rise of 23.9% from its EPS of $6.11 in the corresponding four quarters of the previous year. This EPS growth is expected to be driven by revenue growth and the expansion of its net margin.
Could RH’s Price Correction Mean a Buying Opportunity? On the same day, analysts had an average price target of $156.94 on the stock, which represented a return potential of 41.6% from its price of $110.82. Although RH has fallen since its announcement of its fiscal 2018 second-quarter earnings on September 4, many analysts have raised their price targets on its stock.
As of October 8, RH (RH) was trading at $110.82, a fall of 26.7% since it announced its earnings for the second quarter of fiscal 2018 on September 4.
Of the 33 analysts that follow Lowe’s, 81.8% have given it a “buy” rating, and the remaining 18.2% have given it a “hold.” On average, analysts have a price target of $121.04, which represents a return potential of 8.3% from its stock price of $111.75. Of the 35 analysts covering Home Depot (HD), 77.1% have given it a “buy” rating, and the remaining 22.9% have given it a “hold.” On average, analysts have set an average price target of $215.47, which represents a return potential of 5.8% from its current stock price of $203.74.
Of all the available valuation multiples, we’ve opted for the forward PE multiple due to the high visibility of home improvement companies’ earnings. A forward PE multiple is computed by dividing a company’s stock price by analysts’ earnings’ estimates for the next four quarters.
Year-to-date, Williams-Sonoma (WSM) has returned 22.1%, driven by strong performances in both the first and second quarters of 2018. In the first half of 2018, Williams-Sonoma posted revenue of $2.48 billion compared to $2.31 billion in the first half of 2017. Revenue growth was driven by the adoption of a new accounting standard and growth in e-commerce and retail sales.
In this series, we’ll look at the performances of five home improvement companies—Home Depot (HD), Lowe’s (LOW), RH (RH), Williams-Sonoma (WSM), and Bed Bath & Beyond (BBBY)—in the first half of 2018. We’ll also cover management guidance and analyst expectations for 2018. Finally, we’ll look at these companies’ valuation multiples and analyst recommendations.
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Of the 22 analysts following Bed Bath & Beyond (BBBY), 4.5% say “buy” as of September 27 while 59.1% say “hold,” and the remaining 36.4% say “sell” recommendation. On the same day, analysts set an average price target of $15.31, which represents a potential return of 3.0% from its current stock price of $14.86.
Valuation multiples help investors compare companies with similar business models. Of all the valuation multiples, we’ve opted for the forward PE multiple due to the high visibility in Bed Bath and Beyond’s (BBBY) earnings. The forward PE multiple is calculated by dividing the company’s stock price from analysts’ earnings estimates for the next four quarters.
Bed Bath & Beyond (BBBY) posted adjusted EPS of $0.36, which were 28.0% lower than analysts’ expectation of $0.50 for the second quarter of fiscal 2018. Also, year-over-year, the company’s EPS declined 53.2% from $0.77 in the second quarter of fiscal 2017.
Lowe’s (LOW) stock reacted positively to SunTrust Robinson’s upgrade on September 28. On the day, the company’s stock price rose to a high of $117.70, a new 52-week high, before closing at $114.82, which represents a rise of 0.3% from its previous day’s closing price.
For fiscal 2018’s second quarter, Bed Bath & Beyond (BBBY) posted a gross margin, EBIT margin, and net margin of 33.7%, 2.7%, and 1.7%, respectively. These margins had been at 36.4%, 6.5%, and 3.7%, respectively in the second quarter of fiscal 2017.