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Lowe's Hits 52-Week High on Strategic Growth Initiatives

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Mooresville-based Lowe's Companies, Inc. (LOW - Free Report) looks promising, backed by its strategic acquisitions, merchandising initiatives and omni-channel endeavors. It is the world’s second-largest home improvement retailer, primarily operating in the U.S., Canada and Mexico.

Buoyed by these factors, this Zacks Rank #2 (Buy) company hit a 52-week high of $83.26 on Jul 11, though it eventually closed lower at $82.80. Moreover, the stock witnessed a nearly 21% hike over the past one year.

LOWES COS Price and Consensus

LOWES COS Price and Consensus | LOWES COS Quote

Lowe’s is constantly gaining from its acquisitions. This is evident from the buyout of Orchard Supply Hardware Stores that has been aiding comparable-store sales growth. We believe the acquisition will boost Lowe’s top-line results and overall profitability. Additionally, Orchard’s smaller-format stores located at prime locations of California are bolstering the company’s market position, helping it capitalize on under-penetrated markets.

Further, Lowe’s acquisition of ATG Stores, one of the leading online retailers of home improvement and lifestyle products, highlights its dedication toward expanding product offering. The buyout is facilitating the company to target new customers and expand its range of items on Lowes.com. Moreover, the recent buyout of RONA, a key Canadian retailer and supplier of hardware, will help further augment Lowe’s position in the Canadian market.

Lowe’s began fiscal 2016 on a strong note, delivering better-than-expected results in the first quarter. Also, both earnings and sales improved year over year. The company beat revenue estimates for the fourth consecutive quarter. Notably, it has surpassed the Zacks Consensus Estimate in seven out of the past eight quarters.

Additionally, the company is streamlining its store portfolio and remains focused on its strategy of enhancing customer shopping experience and merchandising transformation. This is likely to boost sales, going forward.

We believe that an improving job scenario, gradual recovery in the housing market and merchandising initiatives bode well for Lowe’s over the long run.

Stocks to Consider

Some other favorably ranked stocks in the retail sector include Beacon Roofing Supply, Inc. (BECN - Free Report) and The Children's Place, Inc. (PLCE - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and The Home Depot, Inc. (HD - Free Report) , carrying a Zacks Rank #2.

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