Lowe’s Companies Inc (LOW) announced on Tuesday that it was looking at all options for its retail operations in Mexico and particular non-core activities in the United States, as it continues to streamline its business. The company also reported a slower-than-expected growth in comparable sales, which led to a nearly 6% drop in its shares yesterday.
Shares of Lowe’s Companies Inc closed lower for a ninth consecutive trading session in New York on Tuesday. It has also been the steepest daily loss since February 28th. The stock went down 5.66% ($5.17) to $86.18, after touching an intraday low at $84.81, or a price level not seen since May 10th ($84.09).
Shares of Lowe’s Companies Inc have retreated 7.27% so far in 2018 compared with a 1.19% drop for the benchmark index, S&P 500 (SPX).
In 2017, Lowe’s stock went up 30.68%, thus, it outperformed the S&P 500, which registered a 19.42% return.
Total revenue went up 4% year-on-year to $17.42 billion during the third quarter ended on November 2nd. In comparison, analysts on average had expected revenue of $17.36 billion.
Sales at stores, which are open for at least 12 months, were reported to have surged 1.5% year-on-year during the latest quarter, thus, falling well short of Wall Street consensus estimate pointing to a 2.93% growth.
The department store chain said it was exploring all options for its 13 outlets located in Mexico and that it would “exit” its contracting services business, Alacrity Renovation Services, as well as its security and smart home app, Iris Smart Home.
“With our strategic reassessment substantially completed, we can now intensify our focus on the core retail business,” Lowe’s Chief Executive Officer Marvin Ellison was quoted as saying by Reuters.
“Our transformation will take time,” Ellison added.
Earlier in November, Lowe’s said it planned to close 31 underperforming stores in Canada and 20 stores in the United States in relation with restructuring efforts.
Net income attributable to shareholders dropped to $629 million ($0.78 per share) during the quarter ended on November 2nd, from $872 million ($1.05 per share) in the year-ago period. The latest results included a pretax charge of $280 million.
Meanwhile, Lowe’s earnings per share, excluding special items, were reported at $1.04 during the third quarter, which outstripped the median analyst forecast of $0.98 per share.
The department store operator also revised down its full-year sales growth forecast to 4% from 4.5%, as expected previously.
According to CNN Money, the 30 analysts, offering 12-month forecasts regarding Lowe’s Companies Incs stock price, have a median target of $119.00, with a high estimate of $138.00 and a low estimate of $94.00. The median estimate represents a 38.08% upside compared to the closing price of $86.18 on November 20th.
The same media also reported that 21 out of 32 surveyed investment analysts had rated Lowe’s Companies Incs stock as “Buy”, while 8 – as “Hold”.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Lowe’s Companies Inc (LOW) are presented as follows:
Central Pivot Point – $94.16
R1 – $96.75
R2 – $100.24
R3 – $102.83
R4 – $105.41
S1 – $90.67
S2 – $88.08
S3 – $84.59
S4 – $81.09
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