Lowe's (LOW): Stock Likely To Beat On Earnings In Q2 Again?

Lowe's Companies, Inc. (NYSE:LOW) , the world’s second-largest home improvement retailer, is slated to report second-quarter fiscal 2016 results on Aug 17. The company’s past performance reveals that it surpassed the Zacks Consensus Estimate by an average of 0.6% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Likely Earnings Beat

Our proven model shows that Lowe's is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at $1.44 and the Zacks Consensus Estimate is pegged at $1.41. So the ensuing +2.13% ESP and the company’s Zacks Rank #2 (Buy) make us reasonably confident of an earnings beat.

Factors Influencing this Quarter

Lowe’s has been gaining from its omni-channel endeavors, merchandising initiatives and strategic acquisitions. Also, these factors have helped solidify the company’s position in the home improvement sector. Additionally, the recent buyout of RONA will further strengthen its position in the Canadian market. Moreover, the company is streamlining its store portfolio, which along with its strategy of enhancing customer shopping experience and merchandising transformation, will likely generate incremental sales.

Further, the acquisition of Orchard Supply Hardware Stores has been aiding comparable-store sales growth. We believe the Orchard acquisition is a crucial move on Lowe’s part, as increasing square footage in the key California market offers significant opportunities for the company to improve its top line and profitability.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Best Buy Co., Inc. (NYSE:BBY) has an Earnings ESP of +7.14% and a Zacks Rank #2.

The Children's Place, Inc. (NASDAQ:PLCE) has an Earnings ESP of +25.00% and a Zacks Rank #2.

Hibbett Sports, Inc. (NASDAQ:HIBB) has an Earnings ESP of +7.14% and a Zacks Rank #2.