Lowe's Shares Slide 6% As Company Guides Lower, But Analysts See Big Upside

By Andrea Riquier Markets MarketWatch Pulse

Lowe's Cos. [s:LOW] on Wednesday reported earnings that missed expectations and guided lower, sending the stock down nearly 6% in midday trading. Analysts at Credit Suisse called the earnings news "not a clean quarter," but pointed out what they called "some bright spots" for Lowe's in a morning note. The home-improvement retailer had stronger comparables, Credit Suisse wrote, and sales even accelerated in July. The Credit Suisse analysts, who have an outperform rating on the stock, said a calendar quirk may have depressed growth in earnings per share, which were reported as 14%. The company's lowered guidance reflects higher expenses, since sales are projected to stay the same, the analysts said. They also noted that Lowe's is closing in on rival Home Depot [s:HD] in terms of comparable sales. Their $94 price target for Lowe's implies a 32% increase and is a bit higher than the FactSet consensus target price of $89.12. The mean rating among analysts surveyed by FactSet is overweight.

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