LOW & TGT: How are the stocks faring after earnings release?

August 17, 2022 05:30 AM PDT | By Rupam Roy
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  • The LOW stock advanced while TGT stock slipped in the pre-market trading.
  • In 2022, Lowe's expects its total sales between US$ 97B to US$ 99B.
  • Target Corporation's revenue grew over three per cent YoY in Q2 FY22.

The retail sector had been on the investors' radar this week, with several companies from the segment posting their quarterly earnings results. On August 16, companies like Walmart Inc. (NYSE: WMT) and Home Depot (NYSE: HD) caught the eyes of the investors following their earnings release.

The trend continued on Wednesday, with Lowe's Companies, Inc. (NYSE: LOW) and Target Corporation (NYSE: TGT) posting their quarterly financial results, providing more insights on the broader consumer activity.

Let's explore the earnings of the two retail firms, which may shed some light on how they have performed in the latest quarter.

Lowe's Companies, Inc. (NYSE: LOW)

The LOW stock increased by over one per cent in pre-market trading on August 17 to trade at US$ 216.7 after it had released its financial results.

The US$ 138.49 billion market cap firm had a dividend yield of 2.03 per cent. The dividend yield is the dividend generated from an investment divided by the asset's recent price.

The retail firm posted total sales of US$ 27.47 billion in Q2 FY22, against sales of US$ 27.57 billion in the prior year's same quarter.

The Mooresville, North Carolina-based firm posted net earnings of US$ 2.99 billion in Q2 2022 compared to earnings of US$ 3.01 billion in Q2 FY21.

For the full fiscal 2022, the company expects its total sales to be between US$ 97 billion and US$ 99 billion, including the 53rd week. The company said that the final week or the 53rd week is expected to bump up its total sales by US$ 1 billion to US$ 1.5 billion.

Lowe's also expects its diluted earnings per share to be between US$ 13.1 apiece and US$ 13.6 per share in fiscal 2022.

Earnings highlights of Lowe’s Companies Inc. (LOW) and Target Corporation (TGT)Source: ©Kalkine Media®; © Canva via Canva.com

Target Corporation (NYSE: TGT)

The TGT stock seemed to have lost momentum in the pre-market trading following its earnings release on Wednesday morning. TGT stock slipped over two per cent to trade at US$ 175.50. Target Corporation had a dividend yield of 2.09 per cent.

The big box department store operator posted a 3.5 per cent growth in its total revenue as it increased to US$ 26.03 billion in Q2 FY21. However, Target Corporation's net earnings deteriorated to US$ 183 million, or US$ 0.39 per diluted share in Q2 FY22, from an income of US$ 1.81 billion, or US$ 3.65 per diluted share in the year-ago quarter.

The US$ 81.38 billion market cap firm said it plans to move cautiously for the remaining year, while the current trends support its previous revenue guidance.

Bottom line:

So far, the second quarter earnings season appeared to be a boon for investors. The indices have marked their best performing months in about a year and a half, primarily supported by the corporate earnings results.

But, given the volatility and other macroeconomic factors, the investors should rigorously evaluate the firms before considering an investment.


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