Lowe’s Added $15 Billion To Its Stock-Buyback Plans.
Lowe’s shares rose Wednesday after the home-improvement colossus added $15 billion to its stock-buyback plans, bringing the total authorization to $19.7 billion.
The Street – “Underscoring its commitment to return excess cash to shareholders,” the board of the Mooresville, N.C., chain authorized the additional $15 billion buyback, the company said in a statement.
This authorization has no expiration date. The company added the amount to the current authorization, which was $4.7 billion at Dec. 8.
Lowe’s shares recently traded at $158.52, up 4.8%. They have climbed 21% this year, as consumers who were locked down during the coronavirus pandemic got busy on home-improvement projects.
Lowe’s also offered an earnings forecast for full-year fiscal 2020, ending Jan. 29, reiterating its fourth-quarter forecast.
Lowe’s expects GAAP earnings per share of $7.53 to $7.63 and adjusted EPS of $8.62 to $8.72. It sees revenue increasing about 22% for the year.
A survey of analysts by FactSet is looking for GAAP earnings of $8 a share, or an adjusted $8.70, on revenue of $88.11 billion.
“As we drive market-share gains and focus on targeted productivity initiatives, we expect to improve operating efficiency and generate robust levels of free cash flow,” said Chief Financial Officer David Denton.
“We are committed to investing in the business, including expanding our supply chain network to enhance our omnichannel capabilities.”
Morningstar analyst Jaime Katz likes the company but puts fair value at $140.
“Lowe’s still has opportunities in underserved domestic (city) markets and via wider professional penetration, particularly with the tieup of Maintenance Supply Headquarters and Central Wholesalers,” she wrote last month.
“Furthermore, relatively stable housing prices and rising household formations should support further sales growth and cost leverage.”