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Lowe's (LOW) Dips More Than Broader Market: What You Should Know

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In the latest market close, Lowe's (LOW - Free Report) reached $218.05, with a -1.08% movement compared to the previous day. This change lagged the S&P 500's 0.56% loss on the day. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw a decrease of 0.59%.

The the stock of home improvement retailer has fallen by 2.21% in the past month, lagging the Retail-Wholesale sector's gain of 1.08% and the S&P 500's gain of 1.2%.

The upcoming earnings release of Lowe's will be of great interest to investors. It is anticipated that the company will report an EPS of $1.68, marking a 26.32% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $18.45 billion, reflecting a 17.81% fall from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $13.02 per share and a revenue of $86.13 billion, indicating changes of -6.26% and -11.26%, respectively, from the former year.

Any recent changes to analyst estimates for Lowe's should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. Lowe's presently features a Zacks Rank of #5 (Strong Sell).

In the context of valuation, Lowe's is at present trading with a Forward P/E ratio of 16.93. This expresses a premium compared to the average Forward P/E of 12.94 of its industry.

It's also important to note that LOW currently trades at a PEG ratio of 1.57. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Building Products - Retail industry currently had an average PEG ratio of 2.12 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 192, this industry ranks in the bottom 24% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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