Why Lowe's Companies Inc. Stock Rose 11% Last Month

By Jeremy BowmanMarketsFool.com

What happened

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Shares ofLowe's Companies Inc.(NYSE: LOW) were stacking higher last month after the home-improvement retailer delivered an impressive fourth-quarter earnings report. According to data from S&P Global Market Intelligence, the stock finished up 10.5%.

Image source: Lowe's.

As the chart below shows, the stock's gains came almost entirely at the beginning of the month following the earnings report.

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LOW data by YCharts.

So what

Lowe's turned in stellar results on all counts. Comparable sales at the home-improvement retailer accelerated to 5.1%, its fastest pace in several quarters, and overall revenue increased 19.2% to $15.8 billion, which topped estimates at $15.4 billion. The jump in sales was largely attributable to its acquisition of Canadian home-improvement retailer RONA last year, which added nearly 500 stores to Lowe's portfolio.

On the bottom line, adjusted earnings per share surged 45.8% to $0.86 from $0.59 a year ago. CEO Robert Niblock credited the company's "omni-channel platform, customer experience design capabilities, and project expertise."

Now what

Looking ahead, Niblock said 2017 presented a "favorable macroeconomic backdrop for home improvement," and the company's guidance confirmed that view, calling for an overall sales increase of 5% and comparable sales growth of 3.5%. Lowe's plans to open 35 new stores and calls for earnings per share of $4.64, up from $3.99 last year.

With an expanding economy and strong housing market, Lowe's stock looks primed to deliver in 2017 again, continuing its momentum from last quarter.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.