Lowe’s Stock Surges Over 10% in 2019 Following Impressive Q2 Results and Strong Retail Growth
Lowe’s shares soared after surpassing Q2 expectations and reaffirming 2019 guidance amid robust retail performance, easing recession concerns.
Robust retail results ease fears of economic slowdown
Lowe's Companies, Inc. (LOW) experienced a significant stock increase of over 10% after releasing second-quarter financial results that exceeded analyst forecasts. The company reported revenue of $20.99 billion, a 0.5% increase, surpassing consensus estimates by $30 million. Non-GAAP earnings per share reached $2.15, beating expectations by 15 cents. Same-store sales climbed 2.3%, outpacing the 1.8% consensus, while U.S. home improvement revenue grew by 3.2%.
Management credited this growth to effective holiday event strategies and strong performance in the Paint and Pro divisions. These gains were achieved despite challenges such as lumber price deflation and adverse weather conditions. Lowe's reaffirmed its fiscal 2019 outlook, highlighting a favorable macroeconomic environment and sustained progress in its retail fundamentals framework. During the quarter, the company also repurchased nearly $2 billion in shares and distributed $382 million in dividends.
The positive momentum in Lowe’s stock, alongside other retail sector gains, helped mitigate investor concerns over a potential market slowdown amid ongoing U.S.-China trade tensions.
From a technical perspective, Lowe’s stock broke above previous resistance near $107.00, briefly reaching $110.00 before a slight pullback. The Relative Strength Index (RSI) approached overbought territory with a reading of 66.97, while the Moving Average Convergence Divergence (MACD) showed a bullish crossover, indicating potential for a sustained upward trend.
Investors should monitor consolidation around the $107.00 level before anticipating further gains. Should the stock break above this resistance, the next key target is around $116.00. Conversely, a decline below these levels could lead to support testing near $104.00, though this appears less probable given current momentum.
Disclaimer: The author does not hold any positions in the mentioned stocks except through passively managed index funds.
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