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

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Lowe's (LOW - Free Report) closed the most recent trading day at $234.70, moving -1.56% from the previous trading session. This move lagged the S&P 500's daily loss of 0.97%. At the same time, the Dow lost 0.96%, and the tech-heavy Nasdaq gained 0.23%.

Coming into today, shares of the home improvement retailer had lost 3.47% in the past month. In that same time, the Retail-Wholesale sector lost 5.18%, while the S&P 500 lost 0.78%.

Investors will be hoping for strength from Lowe's as it approaches its next earnings release. In that report, analysts expect Lowe's to post earnings of $1.71 per share. This would mark year-over-year growth of 28.57%. Our most recent consensus estimate is calling for quarterly revenue of $20.81 billion, up 2.45% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.95 per share and revenue of $95.64 billion. These totals would mark changes of +34.88% and +6.74%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Lowe's. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. Lowe's is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Lowe's is currently trading at a Forward P/E ratio of 19.95. For comparison, its industry has an average Forward P/E of 11.78, which means Lowe's is trading at a premium to the group.

Meanwhile, LOW's PEG ratio is currently 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Retail was holding an average PEG ratio of 1.7 at yesterday's closing price.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 22, which puts it in the top 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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