Q4 Preview: Analysts Recommend Constructing a Position in Lowe's (LOW) Ahead of Q4 Results

Shares of Lowe's Company Inc. (NYSE: LOW) are trading up roughly 0.04 percent Friday ahead of the release of its fourth-quarter results before the opening bell on February 27th.

The Wall Street quarterly consensus for Lowe's Company is $0.24 per share in earnings on $11.34 billion in revenue. During the fourth quarter of last year, the company reported earnings of $0.21 per share on $10.48 billion in total sales. The company’s guidance calls for earnings to be between $0.20 and $0.23.

For the full year 2011, analysts on the Street are currently estimating earning of $1.62 per share on $49.91 billion in total sales. The company’s guidance calls for earnings to be between $1.57 and $1.60.

The fourth quarter conference call is scheduled for 9:00 am ET on February 27, 2012.

According to data from Bloomberg, shares of Lowe's Company have 13 Buy ratings, 13 Hold ratings and 2 Sell rating. The average price target on shares of LOW is $28.50 with a range from $24 to $34.

Analyst Comments:

• Goldman Sachs encourages investors to purchase shares of LOW ahead of the release. The firm notes the consensus is barely above the company's guidance, which was released well ahead of the unexpected warmer weather. Goldman also highlights Lowe’s has been most likely experiencing stronger sales as almost nothing but positive news has been coming out of the housing sector.
  
  Goldman is reaffirming its Buy rating and $29 price target on the stock ahead of the release.
  
  
• Despite the warmer weather, JPMorgan anticipates earnings will fall inline with expectations as comps rise 1.5 percent. The firm also forecasts gross margin will decline by 40 basis points as a result of EDLC initiatives.
  
  An analyst at JPMorgan comments, "In the scenario that the economy doesn’t fulfill its hope, we’d be particularly worried for LOW, which has benefitted from numerous discrete catalysts from September to December (Ackman pitch, store closures, increased leverage, and new remerchandising strategy)."
  
  JPMorgan is maintaining its Neutral rating and $30 price target on the company going into the quarterly results.
  
  
• Deutsche Bank predicts the company's earnings will miss expectations by $0.01 as comps fall flat and sales only increase by 8 percent. The firm believes management used heavy promotions during the quarter to drive sales.
  
  Deutsche Bank is reiterating its Buy rating and $31 price target on the stock ahead of the release.

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