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Lowe's (LOW) Gains But Lags Market: What You Should Know

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In the latest trading session, Lowe's (LOW - Free Report) closed at $97.51, marking a +0.45% move from the previous day. The stock lagged the S&P 500's daily gain of 0.63%. Meanwhile, the Dow gained 0.68%, and the Nasdaq, a tech-heavy index, added 0.64%.

Coming into today, shares of the home improvement retailer had lost 11.67% in the past month. In that same time, the Retail-Wholesale sector lost 3.45%, while the S&P 500 lost 4.95%.

LOW will be looking to display strength as it nears its next earnings release, which is expected to be November 20, 2018. In that report, analysts expect LOW to post earnings of $1 per share. This would mark a year-over-year decline of 4.76%. Our most recent consensus estimate is calling for quarterly revenue of $17.36 billion, up 3.54% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.21 per share and revenue of $71.60 billion. These totals would mark changes of +18.68% and +4.35%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LOW. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. LOW is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that LOW has a Forward P/E ratio of 18.63 right now. This represents a premium compared to its industry's average Forward P/E of 11.83.

Also, we should mention that LOW has a PEG ratio of 1.3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Retail industry currently had an average PEG ratio of 1.3 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 108, putting it in the top 42% of all 250+ industries.

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

To follow LOW in the coming trading sessions, be sure to utilize Zacks.com.


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