Lowes Earnings Are Still 'some Of The Best' In Retail: Credit Suisse

By Ciara Linnane Markets MarketWatch Pulse

Home-improvement retailer Lowes Corp.'s earnings call scheduled for 9.00 a.m. Eastern will be key to understanding its story after first-quarter earnings fell short of estimates, Credit Suisse said Wednesday. The company's headline numbers were disappointing as expectations had built ahead of the release, following solid numbers from rival Home Depot , analysts wrote in a note. But the report "still represents some of the best results in retail, in our view, with comps +2.0% and EPS +18% or 13% ex-tax change, on top of 24% last year." Credit Suisse is expecting Lowes earnings to improve in the second quarter, as comparisons will be easier and underlying trend remain healthy. The key questions heading into the call are: " Assessing underperformance vs. HD: did LOW lose share? How much of the difference was regional vs. Pro vs. category trends?" the analyst wrote. Guidance will also be key, as will any update on April and May. "If LOW points to a stronger trend and isolates some of the difference vs. Home Depot to March weather and seasonal factors, that stock could reverse after what seems like an initial pullback," they wrote. Lowes shares were down 4.4% premarket, but have gained 16% in 2017, while the S&P 500 has gained 7$.

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