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Lowe's (LOW) Stock Up 42.6% in a Year: How 2022 Unfolds

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Lowe's Companies, Inc. (LOW - Free Report) is poised well for solid growth this year, thanks to its technology advancements, merchandise category and strength in Pro business. LOW is steadily benefiting from a strong execution of strategies, including the Total Home strategy. The strategy is focused on boosting its productivity and enriching the integrated omni-channel shopping experience. It is likely to grab higher market share across Lowe’s DIY and Pro categories.

This renowned home-improvement retailer’s shares have appreciated 42.6% in the past year, outperforming the industry’s 33.8% rally. A Momentum Score of B coupled with an expected long-term earnings growth rate of 13.7% for this currently Zacks Rank #1 (Strong Buy) stock further speaks volumes. You can see the complete list of today’s Zacks #1 Rank stocks here.

For fiscal 2022, the Zacks Consensus Estimate for Lowe’s sales and earnings per share (EPS) suggests growth of 0.8% and 7.6%, respectively, from the year-ago period’s corresponding figures.

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Let’s delve deeper.

More on Strategies

Lowe’s is focused on enhancing its omni-channel retailing capabilities in in-store operations, website and supply chain to resonate well with the customers’ demand to shop, whenever and wherever they like.

Management launched Lowe's' One Roof Media Network and aims to boost digital advertising. Its focus on perpetual productivity improvement or PPI initiative is also consistently yielding results as the company leverages store payroll, using technology to lower tasking hours, improve customer service and drive sales productivity. Apparently, sales at Lowes.com increased 25% during the third quarter of fiscal 2021. This represents a 9% sales penetration and two-year comps of 158%.

Its Total Home initiative offers complete solutions for various types of home repair and improvement needs. The strategy is an extension of LOW’s retail-fundamentals approach. Management had earlier said that this strategy focuses on strengthening customer engagement and market share, especially through the intensified focus on Pro customers. This initiative encompasses improving online business, refurbishing installation services and enhancing localization efforts.

Pro business is a significant driver for Lowe's. Management is continuously strengthening its pro-focused brands and had earlier refurbished its pro-service business website, LowesForPros.com. During the fiscal third quarter, Pro category again outpaced DIY, increasing more than 16% year over year and 43% on a two-year basis. It is also on track to build out the Pro power tool accessory program, including launches from Spyder and DEWALT.

LOW is quite focused on enhancing the Pro offering across its stores and online with improved service levels, deeper inventory quantities, intuitive store layout and addition of Pro-focused brands.

Wrapping up, Lowe’s is poised well for growth in 2022 and appears a solid investment bet on the back of its above-discussed growth efforts.

More Solid Picks in Retail

Some other top-ranked stocks are Home Depot (HD - Free Report) , Fastenal (FAST - Free Report) and Beacon Roofing (BECN - Free Report) .

Home Depot, a renowned home-improvement retailer, presently flaunts a Zacks Rank of 1. HD has a trailing four-quarter earnings surprise of 12.1%, on average. The stock has rallied 47% in the year-to-date period.

The Zacks Consensus Estimate for Home Depot’s fiscal 2022 sales and EPS suggests growth of 2% and 4.3%, respectively, from the corresponding year-ago period’s levels. HD has an expected EPS growth rate of 12.2% for three-five years.

Fastenal, the wholesale distributor of industrial and construction supplies, has a Zacks Rank #2 (Buy) at present. FAST has a trailing four-quarter earnings surprise of 2%, on average.

The Zacks Consensus Estimate for Fastenal’s 2022 sales and EPS suggests growth of 9.1% and 9.6%, respectively, from the year-ago corresponding figures. FAST has an expected EPS growth rate of 9% for three-five years.

Beacon Roofing is the distributor of residential and non-residential roofing materials, and complementary building products. BECN carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Beacon Roofing’s fiscal 2022 sales and EPS suggests growth of 7.1% and 11.8%, respectively, from the year-ago corresponding figures BECN has a trailing four-quarter earnings surprise of 566.8%, on average.

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