On Wednesday, Piper Sandler expressed a positive outlook ahead of the upcoming Investor Days for Tractor Supply Company (NASDAQ:TSCO) and Lowe's Companies Inc. (NYSE:NYSE:LOW). The firm anticipates that these events will serve as modest positive catalysts for the stocks, with particular emphasis on TSCO. According to InvestingPro data, Lowe's has demonstrated strong momentum with a notable 27.88% return over the past six months, reflecting investor confidence in the company's direction.
Tractor Supply Company is expected to benefit from a recent surge in sales due to colder weather conditions. Analysts predict that TSCO will confirm its long-term comparable sales growth algorithm of 4%-5% and unveil new sales-driving initiatives.
These initiatives are likely to focus on improved customer segmentation and localized merchandising strategies. As a result, Piper Sandler has set a price target for TSCO at $332, which is based on a 26 times multiple of the estimated 2026 earnings per share (EPS).
For Lowe's Companies Inc., the firm anticipates that the home improvement retailer will provide a preliminary outlook for 2025 that aligns with the consensus EPS of $12.55, which equates to a 5.5% growth in EPS. This is expected despite the company's focus on reducing debt in the coming year, which may limit share buybacks. With current revenue of $83.72 billion and a "Good" financial health score from InvestingPro, Lowe's maintains a strong market position.
The company has also demonstrated commitment to shareholder returns, having raised its dividend for 41 consecutive years. Lowe's is set to showcase a new workwear partnership with Carhartt and an expansion of its pet food selection in more stores. Piper Sandler has set a price target for LOW at $307, using a 22 times multiple of the estimated 2026 EPS.
Both companies, however, face risks that could impact their performance. For TSCO, these risks include macroeconomic factors, commodity price fluctuations, weather conditions, the strategy for store expansion, and competition.
Similarly, LOW's risks encompass economic conditions, potential loss of key executives, weather impacts, competition, and changes in interest rates. Investors seeking deeper insights into these risks and opportunities can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 US stocks and provide expert analysis on key metrics and market positioning.
Piper Sandler maintains an Overweight rating on both TSCO and LOW, reflecting a confidence in the companies' potential for stock performance. The upcoming Investor Days, scheduled for this Thursday, December 5, and the following Wednesday, December 11, are expected to provide further insights into the companies' strategies and growth prospects.
In other recent news, Lowe's Companies Inc. reported robust third-quarter earnings, exceeding consensus estimates with an adjusted earnings per share (EPS) of $2.89.
The home improvement retailer also updated its 2024 EPS guidance to a range of $11.80 to $11.90, aligning with current street estimates. Analysts at firms such as Truist Securities, Mizuho (NYSE:MFG), and Piper Sandler have adjusted their price targets for Lowe's, reflecting a generally positive outlook for the company.
TD Cowen maintained its Hold rating on Lowe's, citing macroeconomic pressures and interest rate environments as potential challenges. KeyBanc noted a decline in retail spending, particularly in the Hardlines/Broadlines sector, which includes Lowe's.
However, Truist Securities suggested that Lowe's could benefit from a potential surge in home-related spending, owing to the stability in the economy and low existing mortgage rates.
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