Renovation Blues: Lowe's Faces Off Against Shifting Consumer Trends And Home Improvement Headwinds

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on Lowe's Companies, Inc. LOW, lowering the price target to $225 from $235.
The analyst remains cautious as the company will likely bear the brunt of general weakness in consumer spending on home improvement due to pressure from a worsened macroeconomic environment, a shift in spending toward services from goods, and homeowners engaging Pros in smaller projects than before.
These factors were faced by Home Depot, Inc. HD during the last reported quarter, the analyst notes.
A sluggish start to the spring selling season from unfavorable weather and lumber price deflation is also likely to weigh on the stock.
Further, lackluster industry trends supporting home improvement spending have deteriorated, with declines in home sales and a slowdown in home price appreciation.
Feldman thinks that near-term pressures related to a softer macro and industry backdrop should keep the stock range bound.
The company will hold its first quarter 2023 earnings conference call on Tuesday, May 23.
The analyst lowered our 1Q23 EPS estimate to $3.42 from $3.55, signaling a sales decline of 9.9% to $21.3 billion vs. $21.7 billion previously.
FY23 EPS estimates are lowered to $13.35 vs. $13.88 previously.
Price Action: LOW shares are trading higher by 3.67% to $206.53 on the last check Wednesday.

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