Stock Analysis & Ideas

Lowe’s Stock: Website Traffic Hints at Mixed Q2 Results

Story Highlights

The TipRank’s Website Traffic tool indicates mixed trends for Lowe’s in Q2. It could deliver mixed results owing to a challenging macro environment and high inflation levels.

Home improvement retailer Lowe’s (LOW) is slated to report its second-quarter results on August 17. The earnings report is expected to provide insights into the severity of the declining housing market and the uncertainty in the macro environment. The TipRanks Website traffic tool shows mixed trends for LOW’s Q2 results.

Lowe’s Website Traffic Reflects Mixed Trends

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Lowe’s performance this quarter.

According to the tool, the number of visits to Lowes.com was up 5.67% quarter-over-quarter. Meanwhile, Lowe’s website recorded a 13.14% monthly decline in global visits in July compared previous month. Also, year-to-date, Lowe’s website traffic dropped by 24% compared to the previous year.

Consequently, the mixed website traffic signals the risk of Lowe’s delivering mixed Q2 results.

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What are Analysts’ Saying about Lowe’s Q2 Results?

Despite the mixed website traffic trends and challenging macro environment, analysts expect Lowe’s to deliver strong Q2 results. Earnings per share (EPS) are expected to be $4.59 compared to $4.25 in the year-ago quarter. 

For the full year, Lowe’s is projecting earnings of between $13.10 and $13.60 a share, against analysts’ estimates of $13.38. Revenue is expected to be in the range of $97 billion – $99 billion, against estimates of $98.13 billion.  

Is Lowe’s a Buy or Sell?

The second quarter is seasonally the strongest quarter for wholesale building retailers such as Lowe’s. It is during this quarter that home projects pick up steam in the summer months. However, heightened inflation levels and a challenging macro environment could have affected companies’ ability to draw in big orders, as was the case in the previous year.

Slowing “do-it-yourself” in home improvements and general retail weakness could take a toll on Lowe’s Q2 results. Last week, Citigroup analyst Steven Zaccone downgraded the stock to a Hold from a Buy and cut the price target to $205 from $222. According to the analyst, the company still has a tough road ahead to expanding its margins amid a weakening macro backdrop. 

Overall, the consensus among analysts for Lowe’s stock is a Moderate Buy based on 14 Buys and six Holds. The LOW average price target of $228.61 implies an upside potential of 9.89% from current levels. Shares have declined almost 18% year-to-date.

Final Thoughts

The mixed trends in website traffic indicate Lowe’s could deliver mixed Q2 results. Consumer spending on home improvement projects is believed to have taken a hit in Q2 owing to elevated inflation levels at four-decade highs. However, backlogs of orders in the home improvement business are expected to fuel comparable store sales through the end of the year.

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