Lowe’s (LOW) landed a surprise callout this weekend amid growing concerns on the housing market and the impact of a potential recession in the U.S. The publication pointed out that the home improvement retailer has a plan to minimize the damage by cutting advertising expenses and delaying some longer-term projects.
By Barron’s calculations, even if sales drop to $87B for Lowe’s this year in a worst-case scenario, margins would come in at 13.3% vs. 12.9% in 2022. EPS is seen being on a reasonable path to $20 a year by 2026 to represent roughly 10% compound annual growth rate from last year’s mark. The main takeaway is that the current share prices offer long-term investors a compelling entry point with the stock trading at a discount to both rival Home Depot and the S&P 500 index.